Chip designer Nvidia Corp (NVDA.O) has mentioned on Wednesday that U.S. officials have asked it to stop exporting two top computing chips for artificial intelligence work to China. It was a work that would cripple Chinese firms’ ability to carry out advanced work just as image recognition and hamper Nvidia’s business in the country.

HIGHLIGHTS
The ban affected its A100 and H100 chips designed to speed up machine tasks
New license necessities received and stopped MI250 artificial intelligence chips
Chinese organizations did not perform affordably without the American chips

The particular announcement signals a significant escalation of the U.S. crackdown on China's technological capabilities as tensions would bubble over the fate of Taiwan. It was the place where the chips for Nvidia and almost every major chip firm were manufactured.

Nvidia shares fell 6.6% after certain hours. The company had mentioned that the ban would affect its A100 and H100 chips which were designed to hurry up machine learning tasks that may interfere with completion of developing the H100, the flagship chip that was declared this year.

Shares of rival Advanced Micro Devices Inc (AMD.O) fell 3.7% after certain hours. As per an AMD representative, it had received new license necessities that may stop its MI250 artificial intelligence chips from being exported to China however it would believe that its MI100 chips would not be affected at all. AMD has mentioned that it do not believe the new rules which would have a material impact on its business.

The U.S. Department of Commerce has not mentioned about the new criteria that was laid out for AI chips which may no longer be shipped to China however it has mentioned that it has been reviewing its China-related policies and practices in order to 'keep advanced technologies out of the incorrect hands.”

As per Shu Jieting, the commerce ministry spokesperson in a news conference that 'The U.S. would continue to abuse export control measures in order to limit exports of semiconductor-related things to China, that China would firmly oppose.'

Well, this was not the first time that the U.S. has moved to choke out Chinese firms' supply of chips. In 2020, the former president Donald Trump's administration had banned the suppliers from selling the chips which were made by using the U.S. technology to tech giant Huawei without a special license.

Without the American chips from firms like Nvidia and AMD, Chinese organizations were unable to cost-effectively perform the advanced computing which was used for image and speech recognition, among several alternative tasks.

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