US regulators deny blocking AI chip exports to Middle East

The U.S. Department of Commerce denied blocking AI chip sales to the Middle East and remained silent about whether the requirements were only imposed on specific countries.

The United States Department of Commerce said on Aug. 31 that the Biden administration has “not blocked chip sales to the Middle East,” according to a report from Reuters.

This comes after disclosures were revealed in a Nvidia report that the U.S. government had expanded requirements for export licenses for artificial intelligence (AI) chips.

Advanced Micro Devices (AMD), a direct competitor of Nvidia, also received a similar letter from regulators.

The Department of Commerce did not comment on whether the requirements were imposed on specific U.S. companies. However, the new rules would require Nvidia and AMD to obtain licenses before selling flagship chips to “some Middle Eastern countries,” according to the filing.

Neither of the two companies has revealed if they have applied for said licenses or if there was any feedback on licensing for that region.

Nvidia warned regulators in its quarterly report that being “effectively excluded from all or part of China” could potentially “harm” long-term results for the company.

In October 2022, the Biden administration issued the initial export controls in an effort to slow China from developing high-level AI systems with powerful semiconductor chips made by U.S. companies.

Officials in Washington said they are considering tightening the aforementioned regulations even more in a statement made on June 29, which would further limit the computing power on chips available in the Chinese market.

The moves made by the U.S. government have been under close watch from other regulators around the world. Shortly after the U.S.’s initial regulations came into effect, an agreement was made with the Netherlands and Japan to restrict exports of semiconductor manufacturing equipment to China.

Officials in the United Kingdom, France and Germany have all openly said they are considering screening Chinese foreign direct investment in crucial sectors such as AI.

China has responded by saying it will control the export of gallium and germanium products, the primary raw materials needed to produce AI chips.

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