The U.S. Department of Commerce is restricting the sale of advanced artificial intelligence (AI) chips to China after announcing new export rules in October. The latest measures specifically target Nvidia’s A800 and H800 AI chips, with potential implications for semiconductor giants Intel and AMD. Additionally, the new rules impact the export of semiconductor manufacturing equipment from major companies like Applied Materials, Lam, and KLA.

The new rule change comes as chip makers specifically designed chips with slightly underperforming specifications to circumvent the previous ban from October 2022. The new rules target these chips specifically made for China and will require chip makers to notify the U.S. government about new underperforming chips before they’re shipped to China.

Why is the U.S. Restricting AI Chip Sales to China?

In an effort to strengthen national security, the United States is trying to prevent China from acquiring advanced semiconductors that could propel advancements in artificial intelligence, especially those with military applications. China, along with 21 other countries, including Russia and Iran, will face the advanced chip export restriction. Restricting the sales of advanced AI chips and limiting the sale of advanced chip-making machines will slow down U.S. adversaries from catching up with Western chip makers.