Advanced Micro Devices Inc. AMD has reportedly encountered a significant obstacle in its efforts to sell a specialized artificial intelligence chip to the Chinese market.
What Happened: The U.S. Department of Commerce has imposed restrictions on the export of high-powered AI processors.
AMD had sought approval from the U.S. government to sell the AI chip to Chinese clients, which was designed to meet U.S. export regulations, as it had lower performance than AMD’s chips sold outside China, reported Bloomberg, citing people familiar with the matter.
However, U.S. officials have informed AMD that the chip was still too potent, necessitating a license from the Bureau of Industry and Security within the Commerce Department for its sale, according to the sources.
AMD did not immediately respond to Benzinga's request for comments, and it remains unclear whether the company will apply for a license.
The U.S. has been actively limiting China’s access to advanced semiconductors and chip manufacturing tools, fearing that Beijing could gain a military advantage.
The Joe Biden administration introduced initial export controls in 2022, which were further strengthened in October 2023 to include more technologies and restrict sales to intermediary nations.
This has led to a series of export restrictions, including the limitation of the sale of powerful AI chips to China, a move that has affected major players like Nvidia Corporation NVDA and AMD.
Why It Matters: Despite these restrictions, Chinese companies have reportedly been making strides in advanced chip development.
For instance, last month, it was reported that Semiconductor Manufacturing International Corp (SMIC), China’s largest chipmaker, has managed to produce more sophisticated chips despite U.S. sanctions.
Meanwhile, in November 2023, Jensen Huang's Nvidia confirmed its intention to dominate the Chinese chip market, despite increasingly severe export restrictions from the U.S. government.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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