The U.S. government has restricted sales of Nvidia's high-performance compute GPUs to the Middle East and some other countries, the company said in a regulatory filing this week. One of the reasons why the Biden administration decided to require an export license on Nvidia's A100 and H100 products and servers on their base is to thwart China's AI development by preventing the GPUs from being resold to China, reports The Guardian.
"During the second quarter of fiscal year 2024, the U.S. government informed us of an additional licensing requirement for a subset of A100 and H100 products destined to certain customers and other regions, including some countries in the Middle East," a statement by Nvidia reads. "We have sold alternative products in China not subject to the license requirements, such as our A800 or H800 offerings."
The affected chips, namely the H100 and A100 models, are already restricted for sale in China and Russia, which is why Nvidia has developed H800 and A800 models with reduced performance to sell in China. Although Nvidia disclosed these new limitations in a U.S. regulatory filing, the company did not reveal which countries in the Middle East are specifically impacted by these controls.
Both Saudi Arabia and the UAE have been strengthening their AI prowess in the recent years, which is why they are significant purchasers of Nvidia's chips. Saudi Arabia and the UAE have been in talks with China to deepen their collaborations. Furthermore, Saudi Arabia even entered into a strategic alliance with China, committing to work collaboratively on artificial intelligence projects.
Now, the U.S. government is concerned is that Nvidia's A100 and H100 compute GPUs could be diverted to China from customers in the Middle East. The U.S. is also worried about Chinese companies training AI models overseas due to a domestic shortage of top AI GPUs and then bringing that technology back to China.
Despite the new restrictions, Nvidia stated that the licensing requirement does not significantly impact its revenue and that the company is working with the U.S. government to address the issue.