Skip to content

US Regulators Reject Blocking Middle East AI Chip Sales

The US Department of Commerce has dismissed claims that it is hindering the sales of AI chips to the Middle East, amidst increasing regulations surrounding artificial intelligence exports.

US Department of Commerce
US Department of Commerce

No Blocking of AI Chip Sales

The United States Department of Commerce stated on August 31 that the Biden administration has not obstructed chip sales to the Middle East. This announcement was made in response to recent disclosures in an Nvidia report, which highlighted that the US government had expanded export license requirements for artificial intelligence (AI) chips. Advanced Micro Devices (AMD), a rival of Nvidia, received a similar notice from regulators. Although the Department of Commerce did not specify whether these new regulations targeted specific companies or countries, the filing indicated that Nvidia and AMD would need licenses to sell flagship chips to certain Middle Eastern nations.

Companies Silent on License Applications

Neither Nvidia nor AMD has disclosed whether they have applied for the necessary licenses or received any feedback on their applications for the region.

In related news, an AI chip developer recently secured a $100 million investment from Samsung and Hyundai.

Nvidia Warns of Potential Harm from Exclusion

In its quarterly report, Nvidia cautioned regulators that being effectively excluded from all or part of China could potentially harm the company's long-term results. In October 2022, the Biden administration implemented initial export controls to prevent China from developing advanced AI systems using powerful semiconductor chips manufactured by US companies.

Tightening Regulations on Chip Exports

Washington officials indicated on June 29 that they are contemplating further tightening of regulations, which would limit the computing power of chips available in the Chinese market. This move has been closely monitored by regulators worldwide. Following the initial US regulations, agreements were made with the Netherlands and Japan to restrict exports of semiconductor manufacturing equipment to China. Officials in the United Kingdom, France, and Germany have also expressed their intention to scrutinize Chinese foreign direct investments in key sectors like AI.

China’s Response to Export Controls

China countered by announcing plans to control the export of gallium and germanium products, essential raw materials for producing AI chips.