US AI chip exports to the Middle East strongly, hit Nvidia

The US Commerce Department has implemented new restrictions on the export of advanced artificial intelligence (AI) processors to several Middle Eastern countries, which have had a major impact on US chipmakers AMD and NVIDIA.

The ban requires companies to obtain a license to ship their products to destinations in Saudi Arabia and the United Arab Emirates.

US Boosts AI Chip Exports to Middle East

The U.S. Commerce Department's actions respond to national security concerns about the potential misuse of these high-performance chips. Officials fear China could acquire the processors through resale or using cloud services. This allows advanced military equipment or training of advanced AI models.

These concerns led Middle Eastern countries to be included in the export bans, which were initially aimed at China. In recent weeks, AMD and Nvidia have struggled to get permission to export AI accelerators to the Middle East. The US government has caused these problems by delaying license approvals. The authorities are conducting a security assessment on the use of AI chips overseas and developing a strategy in this regard.

An AI Accelerator is a type of hardware or computer system that helps accelerate AI and machine learning applications, a field currently led by Nvidia. The security review focuses on major sales to countries such as the UAE and Saudi Arabia.

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The US Department of Commerce has stated that they will conduct due diligence through the interagency process. They carefully prepare license applications from companies that want to export these advanced technologies to other countries. This revision has caused a slowdown in license applications in recent weeks, which has hit AI companies hard.

“With respect to advanced technologies, we conduct extensive interagency review of license applications from applicants who intend to transport these advanced technologies around the world,” the Commerce Department's announcement says.

The bans immediately affected the stock market. AMD's share price stood at $162.65, a decrease of 2.50%. Meanwhile, Nvidia was also down a slight 1.2% in Friday's trading session. The U.S.'s ongoing global scrutiny of the spread of advanced technologies means the tech industry must navigate an increasingly complex regulatory environment.