US in Talks with Nvidia to Sell AI Chips to China

The Biden administration is in talks with Nvidia Corp about selling artificial intelligence chips to China, but it has stressed that it cannot sell its most advanced semiconductors to Chinese companies. In an interview with Reuters on Dec 11, US Commerce Secretary Gina Raimondo stated that Nvidia "can, will, and should sell AI chips to China because most AI chips will be for commercial applications."

"What we cannot allow them to ship is the most sophisticated, highest-processing power AI chips, which would enable China to train their frontier models," she went on to say.

Raimondo stated that she spoke with Nvidia CEO Jensen Huang a week ago and that he was "crystal clear." We don't want to deviate from the rules. We'll work with you if you tell us the rules."

Raimondo sent a warning to chips companies on AI chips at a forum last week in California. She said traditionally Commerce drew a "cutline" and companies like Nvidia would create a new chip "just below" that line.

"That's not productive," Raimondo said. "I am telling you if you redesign a chip around a particular cutline that enables them to do AI, I am going to control it the very next day."

Raimondo stated on Dec 11 that the department was collaborating with Nvidia. "They want to do what is right. They obviously want to sell as many chips as they can."

Nvidia did not respond to requests for comment. Huang stated last week that the company was working closely with the US government to ensure that new chips for the Chinese market were compliant with export restrictions.

Separately, Raimondo stated that it was too early to tell if the August formation of a commercial issues working group with China was successful. In November, China's central bank granted a licence to a MasterCard-created joint venture, and the country approved Broadcom's $69 billion acquisition of cloud computing firm VMware. She referred to them as "baby steps in the right direction."