Nvidia Corporation will be banned from selling its top-tier artificial intelligence chips in certain Middle East countries under new export restrictions imposed by the US government.
Nvidia did not state which countries were named in the edict, though the fabless semiconductor titan claimed in a regulatory filing that the restrictions would not have an “immediate material impact”.
The ME export restrictions mark an extension of US sanctions against China, aimed at limiting the dictatorship’s access to cutting-edge AI-focused microchips such as Nvidia’s A100 and H100 designs.
These chips have become a central component to the advancement in AI technology in recent years.
Industry body the Semiconductor Industry Association (SIA) warned last week that Chinese tech firm Huawei is building a shadow network of chip foundries to funnel sanction-hit chipmaking equipment into the country through secret channels.
According to the SIA, Huawei is building these foundries under different corporate identities near the company’s Shenzhen headquarters.
Nvidia did not state that these export controls were in response to the SIA’s allegations.
However, Wedbush analysts stated in an email: "We see the US government's policy shift to require an export license on advanced GPUs shipped to the Middle East as fitting US goals of preventing GPUs from matriculating to certain regions like Russia and China.”
Wedbush analysts do not see any negative impact on the demand for Nvidia products.
Nvidia’s earnings have gone through the roof despite partial export bans to the massive Chinese market.
Soaring demand for A100 and H100 processors saw group revenue hit $13.51 billion in the second quarter, far ahead of Wall Street expectations.
Shares in the California-based company have surged 245% in 2023, making Nvidia the latest trillion-dollar publicly listed company.