U.S. tackles loopholes in curbs on AI chip exports to China

The
U.S.
will
take
steps
to
prevent
American chipmakers
from
selling
products
to China that
circumvent
government
restrictions,
a
U.S. official said,
as
part
of
the
Biden
administration’s
upcoming
actions
to
block
more AI chip exports.

The
new
rules,
details
of
which
Reuters
is
reporting
for
the
first
time,
will
be
added
to
sweeping
U.S.
restrictions
on
shipments
of
advanced chips
and chipmaking
equipment
to China unveiled
last
October.
The
updates
are
expected
this
week,
other
people
familiar
with
the
matter
said,
though
such
timetables
often
slip.

The
new
rules
will
block
some AI chips
that
fall
just
under
current
technical
parameters
while
demanding
companies
report
shipments
of
others,
said
the official,
who
provided
information
on
condition
of
anonymity.

A
spokesperson
for
the
U.S.
Department
of
Commerce,
which
oversees
export
controls,
declined
to
comment.

The
latest
crackdown
on
tech exports to China coincides
with
U.S.
efforts
to
thaw
difficult
relations
between
the
world’s
two
largest
economies.
Several
senior
members
of
the
Biden
administration
have
met
their
Chinese
counterparts
in
recent
months,
and
the
latest
round
of
rules
risks
complicating
the
diplomatic
effort.

The
Biden
administration
has
said
it
designed
the
export curbs to
keep
U.S. chips
and
equipment
from
strengthening China’s
military.
Beijing
has
accused
the
United
States
of
abusing
export
controls
to
suppress
Chinese
companies.
The
restrictions
marked
a
historic
shift
in
U.S.-China tech
policy.

The
Chinese
embassy
in
Washington
did
not
immediately
respond
to
a
request
for
comment.

Last
year,
government
restrictions
kept


Nvidia,
the
world’s
most
valuable chipmaker,
from
shipping
two
of
its
most
advanced AI chips
to
Chinese
customers, chips
that
have
become
the
industry
standard
for
developing
chatbots
and
other AI systems.

But
Nvidia
soon
released
new
variants
for
the
Chinese
market
that
were
less
sophisticated
and
got
around
the
U.S.
export
controls.
One,
named
the
H800,
has
as
much
computing
power
at
some
settings used
in AI work
as
the
company’s
more
powerful
but
blocked
H100 chip.
Still,
some
key
performance
aspects
are
limited,
according
to
a
specification
sheet
seen
by
Reuters.

The
U.S.
now
plans
to
introduce
new
guidelines
for AI chips
that
will
restrict
certain
advanced
datacenter AI chips
that
are
not
currently
captured,
the
U.S. official said.

While
the official declined
to
identify
which
additional chips
will
be
effectively
banned,
Nvidia’s
H800
is
a
semiconductor
sources
have
suggested
the
administration
has
wanted
to
block.

Santa
Clara,
California-based
Nvidia
did
not
immediately
respond
to
a
request
for
comment.

Chips
meant
for
consumer
products
like
laptops
will
be
exempt
from
the
new curbs,
the official said.
But
companies
will
need
to
tell
the
Commerce
Department
when
they
are
filling
orders
for
the
most
powerful
consumer chips
to
make
sure
they
are
not
being used
in
ways
that
threaten
national
security,
according
to
the official.

In
order
to
keep AI chips
the
U.S.
views
as
too
powerful
from China,
the official said
the
U.S.
planned
to
remove
one
of
the
parameters
—
the
“bandwidth
parameter”
—
it
has used
to
restrict exports of
certain AI data
center chips.
By
removing
this
parameter,
another
guideline
kicks
in,
widening
the
scope
of chips
covered.
This
would
likely
mean
the
speed
at
which AI chips
talk
to
each
other
would
be
reduced.

This
is
important
because
training
the
largest AI models
is
impossible
on
one chip and
requires
many chips
tied
together.
If
one
slows
the
speed
they
communicate
at,
it
makes AI development
more
challenging
and
expensive.

The
U.S.
also
plans
to
introduce
a
“performance
density”
parameter
to
help
prevent
future
workarounds,
the official said,
but
declined
to
elaborate.

The
updated
rules
also
are
meant
to
cover AI chips
as
technology
evolves.
The
U.S.
will
require
companies
to
notify
the
government
about
semiconductors
whose
performance
is
just
below
the
guidelines
before
they
are
shipped
to China,
the official said.
The
government
will
decide
on
a
case-by-case
basis
whether
they
pose
a
national
security
risk
but
they
can
be
shipped
unless
the chipmaker
is
told
otherwise.

The
updates
to
the
October
2022
rules may
also
close
a
loophole that
gives
Chinese
companies
access
to
American
artificial
intelligence chips
through
Chinese
units
located
overseas,
as
Reuters
reported
last
week.

The
rules
are
not
expected
to
include
restrictions
on
access
to
U.S.
cloud
computing
services,
or
those
of
allies,
but
the
U.S.
will
seek
comments
on
the
risks
of
such
access
and
how
they
might
be
addressed,
the official said.

The
Biden
administration told
Beijing
of
its
plans to
update
the
contentious rules
this
month,
Reuters
reported
earlier
in
October,
as
part
of
a
policy aimed
at
stabilizing
relations
between
the
superpowers.