US maybe will restrict NVIDIA AI chip exports to some Middle Eastern countries

Reuters and The Telegraph are reporting that NVIDIA said in a regulatory filing this week that the U.S. will extend export restrictions limiting AI chips such as A100 and H100 to some Middle Eastern countries.

In its 10-Q filing with the SEC, NVIDIA mentioned that the U.S. government notified NVIDIA of additional licensing requirements for exporting AI chips such as A100 and H100 to some Middle Eastern countries. The company said it is working with the U.S. government to resolve the issue, and that the new licensing requirements won't affect a significant portion of its revenues because the restrictions affect its A100 and H100 chips, which are designed to accelerate machine-learning tasks, but won't have a "direct material impact" on its results.

In the fiscal quarter ended July 30, Nvidia generated the majority of its sales from the United States, China and Taiwan, with about 13.9 percent of sales coming from all other countries, but the company didn't achieve a revenue breakthrough in the Middle East, according to the data. But before that, both Saudi Arabia and the United Arab Emirates held discussions with China about deepening artificial intelligence ties and ordered thousands of NVIDIA chips.

NVIDIA's rival AMD also received a letter of notification of similar restrictions, a person familiar with the matter said, also saying the move had no material impact on its revenue.

"These restrictions may take the form of 'informed' letters from the U.S. Bureau of Industry and Security that force U.S. companies to obtain approval to export to certain countries or customers on national security grounds" to curb Chinese AI companies, said a senior U.S. trade lawyer the possibility of training AI software outside of China and bringing it back to China.