Nvidia and AMD (AMD] stated Wednesday that they were told by the US government not to export certain high-performance chip products to the second largest economy in the world.
Nvidia stated in a regulatory filing that it was told by US officials that there was a risk that products could be used by or diverted to a military end user.
It stated that the restrictions apply to Nvidia’s A100, H100, and all other integrated circuits. They are effective immediately.
According to the filing, this move could result in Nvidia losing $400 million of its business.
It was roughly the projections of the California-based tech company last week regarding potential sales to China. However, the new requirement could have an impact on those sales, the filing stated.
After-hours trading on Wednesday saw Nvidia stock tumble 6.6%, while AMD stock fell 3.7%
Nvidia stated in a statement to CNN Business that it was working with customers in China to fulfill their future or planned purchases with alternative products. It may also seek licenses to replace the existing products.
AMD, which is also located in California, stated to CNN Business that it has been subjected to new US Department of Commerce requirements. These will affect shipments of its MI250 integrated Circuits to China.
It stated that it did not believe that the new requirements would affect shipments of MI100 integrated systems. “We don’t believe that it has a material effect on our business at the moment.”
These new rules serve as a reminder that US-China tensions continue to be high over tech and business.
A rare agreement between China and the United States on auditing US-listed Chinese companies was reached last week. Although it seemed like there would be a breakthrough in relations between the countries, experts have warned that the deal will not resolve other important issues.
Nvidia, AMD and Russia are also included in the new mandate for chipmakers.
Both companies stated that they don’t currently sell products to Russia.