US Commerce Secretary Says Any AI Chips Designed To Circumvent Restrictions On China Will Be Banned The Very Next Day

Article updated 12/4/2023 5:44 PM ET with a statement from NVIDIA spokesperson:

“We are working with the U.S. government and, following the government’s clear rules, are working to offer compliant data center solutions to customers worldwide.”

US Commerce Secretary believes the sale of AI chips & semiconductor development to China is "the biggest threat we’ve ever had and we need to meet the moment."

At the Reagan National Defense Forum, US Commerce Secretary Gina Raimondo claimed that her department needed higher financial resources to restrict China's rapidly growing semiconductor markets, vowing to deny the hostile nation with cutting-edge technology. The official believes that her department is limited by a lack of financing from Congress, which is why they haven't seen harsher impacts on Chinese markets.

We cannot let China get these chips. Period. We’re going to deny them our most cutting-edge technology. I have a $200 million budget. That’s like the cost of a few fighter jets.

Come on, If we’re serious, let’s go fund this operation like it needs to be funded.

-  US Commerce Secretary Gina Raimondo

Apart from government financing, Raimondo has also questioned the approach of American companies, when it comes to prioritizing US national security over the company's business. She says that while firms like NVIDIA and Intel could witness a drop in revenue, they should pick out a side. The statement by the official means that the US Government has put everything behind,  and is now moving towards doing everything it can to, restrict the progression of Chinese markets, and counter their growing influence.

I know there are CEOs of chip companies in this audience who were a little cranky with me when I did that because you’re losing revenue. Such is life. Protecting our national security matters more than short-term revenue.

-  US Commerce Secretary Gina Raimondo

Another interesting statement made by the Commerce Secretary was how she sees NVIDIA's approach of offering cut-down solutions to China, as a workaround to the US sanctions. Raimondo says that her department will go to extents to reduce the impact of NVIDIA on Chinese markets, by further imposing restrictions to limit the access of China towards cutting-edge equipment completely. This could mean that the upcoming GeForce RTX 4090 D Gaming GPU, along with new cut-down AI chips could witness new set restrictions as well, ultimately preventing their supply as well.

If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day.

-  US Commerce Secretary Gina Raimondo

These AI GPUs and chips have been designed in accordance with US laws and are expected to fall within the 4800 TPP (Total Processing Performance) limit which is to restrict China using them to accelerate AI workloads. Such statements by US officials means that the scope of business would become challenging for tech firms to navigate - especially the ones with large markets in China, such as Intel, NVIDIA and AMD.

News Source: BNN Bloomberg