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In order to bar China from modernizing its military equipment, the US has passed a new law to restrict the US chip makers from exporting certain items to China.

This would affect Nvidia and AMD grossly, as they export a couple of high-selling GPUs to China that may be used in their regular businesses or military often. These companies are now forced to obtain a license from the US government to export these cards.

A Special Permission to Trade With China

The trade war between the two biggest economies – US and China isn’t going to settle anytime soon. The US, in the past, has levied a number of restrictions on its exports to China, crippling the Chinese economy a bit. Although China is reiterating some sanctions, they aren’t so impacting on the US.

Well, now, the US under Joe Biden is proceeding with a fresh rule of restricting its native GPU makers, like Nvidia and AMD, on exports made to China. As per reports, these companies now require a special license, effective immediately, to export their chips to China for being “used in, or diverted to a ‘military end“.

Both Nvidia and AMD have already stopped serving Russia after its war against Ukraine earlier this year. And now, restricting from China means they’d be losing millions of dollars in business. In a regulatory filing made last week, Nvidia said its exports of A100 and H100 chips – designed to speed up machine learning tasks and the systems which include them – will be affected.

Well, AMD, on the other hand, said its MI250 chips to China may be impacted by this new rule, but not much as to have “a material impact” on the business.

Yet, shares of both these companies have fallen down following this news. Nvidia’s shares slipped down by 6.6%, while AMD slipped by 3.7%. Talking about this, the US Department of Commerce to BBC said;

“We are taking a comprehensive approach to implementing additional actions necessary related to technologies, end-uses, and end-users to protect US national security and foreign policy interests”.

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