AMD banned from selling AI chips specifically for China

Attempts by SuperMicro Semiconductor to approve an artificial intelligence chip specifically for the Chinese market have been rejected by U.S. officials.

AMD wanted to get approval from the U.S. Department of Commerce to sell the chip to Chinese customers, but U.S. officials argued that the chip is still highly advanced technology, so AMD would have to get a license from the Commerce Department's Bureau of Industry and Security to sell it, people familiar with the matter said.

This stricter control also affects sales of processors designed specifically for China by NVIDIA, another leading maker of artificial intelligence chips, which has already complied with the 2022 version of the export regulations. To comply with the new 2023 restrictions, the company had to develop new customized, lower-performance products.

The 2022 U.S. ban prevented NVIDIA and AMD from selling their most powerful AI chips to China, forcing them to find new solutions. NVIDIA immediately launched modified models with reduced performance, while AMD has yet to publicly discuss its efforts to develop new AI chips for the Chinese market.

In the Chinese AI chip market, AMD has a low profile relative to Nvidia, which held the majority of the market before the ban went into effect. While AMD said it didn't think it would be seriously affected when the ban went into effect in 2022, it is now moving more aggressively into that market.

Last December, the company launched a new MI300 series of products designed to compete with NVIDIA's offerings, while a product specifically aimed at the Chinese market is known as the MI309. It's not yet clear which Chinese customer is trying to buy AMD's AI chips, but that factor could influence whether the company goes ahead with its license application.

Meanwhile, Huawei is actively developing its own AI chips and chip manufacturing capabilities, which could help the Chinese company fill the U.S. $Advanced Micro Devices(AMD.US)$ $NVIDIA(NVDA.US)$