Nvidia and Anthropic Clash Over U.S. AI Chip Export Controls

Anthropic suggests tweaks to proposed U.S. AI chip export controls | TechCrunch

Anthropic agrees with the U.S. government that implementing robust export controls on domestic-made AI chips will help the U.S. compete in the AI race against China. But the company is suggesting a few tweaks to the proposed restrictions. Anthropic released a blog post on Wednesday stating that the company "strongly supports" the U.S. Department of Commerce's "Framework for Artificial Intelligence Diffusion" ahead of the interim rule's implementation date on May 15. The framework was proposed by outgoing president Joe Biden in January and is meant to bolster AI chip export controls for the purposes of national security and to ensure the U.S.' dominance in AI. It divided the world's countries into three tiers, with each tier having its own guidelines and restrictions. Tier 3, the most restrictive tier, which includes countries that were already impacted by existing export controls, like Russia and China, would face additional restrictions. Tier 2 countries, like Mexico and Portugal, would come under export restrictions for the first time and would have a cap on how many chips they could buy. Tier 1 countries, like Japan and South Korea, would continue without export restrictions. When these restrictions were proposed in January, semiconductor giant Nvidia released a statement calling them "unprecedented and misguided," and suggesting that they would "derail" innovation worldwide. Clearly U.S.-based AI companies, like Anthropic, don't agree. In its blog post, the lab expressed support in broad strokes for the restrictions. Anthropic did, however, propose lowering the number of chips Tier 2 countries can purchase without review and instead encouraging these countries to buy more chips through government-to-government agreements to avoid smuggling and increase U.S. control. The company also thinks the U.S. government should increase funding to ensure these export controls are properly enforced. This statement by Anthropic is not particularly surprising. Anthropic's CEO Dario Amodei has been one of the more vocal U.S. AI leaders in favor of export restrictions. Amodei wrote an op-ed in the Wall Street Journal in January about why the U.S. needs stronger chip export controls. TechCrunch has reached out to Anthropic for more information.

Nvidia takes aim at Anthropic's support of chip export controls

Nvidia clearly doesn't agree with Anthropic's support for export controls on U.S.-made AI chips. On Wednesday, Anthropic doubled down on its support for the U.S. Department of Commerce's "Framework for Artificial Intelligence Diffusion," which would impose sweeping AI chip export restrictions starting May 15. The next day, Nvidia responded with a very different take on the upcoming controls. "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters,'" a spokesperson for Nvidia told CNBC, in reference to Anthropic's claims of how these AI chips are being smuggled into countries targeted by the U.S. controls, like China. Export restrictions would hurt Nvidia's global revenue stream. Nvidia recently stated that a new licensing requirement for its H20 AI chips to be sold in China could cost the company $5.5 billion in Q1 of its 2026 fiscal year.

Despite Nvidia claims, Chinese smugglers have used live lobsters and fake baby bumps to traffic chips

Anthropic has been accused of telling "tall tales" about Chinese GPU smugglers. Nvidia and Anthropic have publicly locked horns over the impending enforcement of the U.S. government's new AI Diffusion Rules. According to a CNBC report, an Nvidia spokesperson has described Anthropic's assertions that the Chinese sometimes go to extraordinary lengths to smuggle Nvidia GPUs, as "tall tales." Specifically, the Green Team has poured scorn on the notion that the Chinese would smuggle GPUs in baby bumps or alongside live lobsters. While Nvidia's stance might have merit if we consider the scale of these bizarre smuggling operations, it is technically wrong, as Chinese Customs have documented these exact occurrences. Check out our links for more details on those particularly peculiar cases. Furthermore, what we see is probably just the tip of the iceberg. In a statement seen by CNBC, an Nvidia spokesperson insisted that American firms should be innovation-focused rather than tell "tall tales." The same member of the Green Team went on to characterize the Anthropic blog's assertions Chinese smugglers are "hiding processors in prosthetic baby bumps and packing GPUs alongside live lobsters," as nonsense. This situation seems to have come to a head as the new AI Diffusion Rules, designed to prevent hostile nations like China from gaining advanced AI technologies from the West, are set to come into force from May 15. The Biden administration formulated these rules towards the end of his term (they were published in January). In one corner, Nvidia is keen to continue supplying as many high-end GPUs to China as the country can absorb, and it is allowed to supply. Meanwhile, Amazon-backed and U.S.-based AI firm Anthropic naturally wishes for a ready supply of AI accelerators stateside, with fewer competitors to push pricing up. It reportedly has plans for bigger and better data centers to propel its fortunes. Moreover, it pleads the case for keeping transformative AI technologies in the U.S. "in alignment with American values and interests."

Anthropic wants tougher AI chip controls, Nvidia not so much

This couldn't possibly be about Chinese model builders taking some of the shine off US rivals, could it? +Comment Anthropic has urged the White House to further tighten so-called AI diffusion rules - which are already set to hurt Nvidia and co by limiting or blocking the sale of higher-end GPUs and accelerators outside the US and a select few allies from mid-May. On Wednesday, the San Francisco-based chatbot maker said in a briefing note these looming export controls won't go far enough to stem the flow of smuggled chips fueling China's continued advancements in artificial intelligence. Overall, Anthropic wants tougher limits on not only the legit sale of AI-targeted processors - particularly those from Nvidia - to various nations, but also a hard crackdown on smugglers using countries where said chips are still legal as a proxy to sneak them into China against US export rules. This comes after Western AI companies were spooked when China's DeepSeek released in late January a free LLM that beat their models on some benchmarks without requiring quite as many resources to train as its American rivals. The export rules in question were published by the Biden administration in mid-January, and sought to address the risks posed by foreign AI infrastructure by establishing three progressively more restrictive tiers. Those tiers are detailed here; China is in tier three. Countries lucky enough to fall into the first tier would retain unfettered access to American-designed accelerators, while nations in the second would be subject to strict import limits. Countries finding themselves in the third tier, meanwhile, would effectively be blocked from buying said chips -- unless they could convince Uncle Sam to grant an exception. However, as we pointed out at the start of the year, the Trump administration would make the final call whether to move forward. Anthropic is urging the Trump administration to go even further. "The US currently leads in advanced semiconductor technology and export controls capitalize on the trend of computing power doubling every two years, so while US chip technology continues advancing, China's progress is slowed," Anthropic argued in its note. "This growing efficiency gap means that by 2027, countries using older chips could face AI training costs that are ten times higher than those with cutting-edge American technology." Anthropic wants the tiers reworked. In particular, it hopes to see the Trump administration slash the amount of compute tier-2 nations are allowed to buy without talking to Uncle Sam first. "Currently, countries in tier two can buy the equivalent of 1,700 Nvidia H100 advanced chips without needing government permission -- roughly $40 million worth of technology. This creates a potential loophole for smuggling," the LLM lab wrote. That said, it's in favor of increasing the allocation to tier-two countries as long as they have "robust" datacenter security and use "government-to-government agreements that prevent smuggling and align technology controls." Finally, Anthropic suggests the Trump administration should increase funding for export enforcement. "Enhanced resources for the Bureau of Industry and Security would significantly improve control effectiveness." Anthropic's stance stands in stark contrast to American chip designers, most notably Nvidia, which has already lost billions in revenue to US export controls. Also on Wednesday, Nvidia CEO Jensen Huang just so happened to call on the Trump administration to loosen restrictions on the sale of AI infrastructure outside the US. "We need to accelerate the diffusion of American AI technology around the world," Huang said in a press briefing. "The policies and encouragement from the administration really need to support that." Nvidia is by far the largest supplier of AI infrastructure in the world, with its GPUs powering the vast majority of training and inference deployments today. As such, it stands to lose the most should the Trump administration tighten the AI diffusion rules, as Anthropic suggests. Huang's efforts to convince Trump to loosen the rules, which reportedly included attending a $1 million-a-head dinner with the President at Mar-a-Lago, apparently aren't playing out the way the GPU supremo hoped. Earlier this month the chip goliath booked a $5.5 billion charge tied to newly implemented export controls on the sale of H20 accelerators to China, including Hong Kong, and other nations of concern. Revenues lost to US export controls are likely to grow considerably should the Trump administration push ahead with the rules. Anthropic's stance on US trade policy might seem like a strange and potentially risky play given Nvidia's dominant position in the AI ecosystem. It sure would be a shame if something happened to their allocation, right? However, Anthropic is far less reliant on Nvidia's hardware than most of its competitors. The California lab maintains a close relationship with Amazon Web Services -- one of its largest backers -- and makes extensive use of its custom Trainium AI accelerators to develop of its Claude family of models. (Incidentally, Amazon was said to have suffered an internal GPU usage crunch in 2024.) Late last year, AWS revealed Project Rainier, an AI supercomputer containing hundreds of thousands of its Trainium2 accelerators, set to power on this year and provide Anthropic with "5x the number of exaFLOPS used to train its latest generation of AI models." Stifling Chinese progress in AI is arguably more important to Anthropic than getting on Huang's bad side. The release of China's DeepSeek R1 back in January shook the AI industry to its core. The base model from which the LLM was derived was said to be trained using much less, but still significant, compute required by its Western competitors. Since then, Chinese cloud providers and model builders have continued to pump out ever-more competitive models such as Alibaba's Qwen 2.5 Max, QwQ, and this week a whole zoo of Qwen 3 models. But it's not just China. The US AI diffusion rules are likely to disrupt the supply of AI accelerators to much of the developed world, which means Anthropic, OpenAI, and other American model builders will face less competition and are less likely to suffer embarrassment at the hands of other nations as well. It seems that Anthropic may just get its wish. Earlier today, Reuters, citing several persons "familiar with the matter" reported that the White House was weighing whether to do away with the three-tier split and negotiate with world governments for a share of US accelerators on a one-on-one basis, making the accelerators yet another bargaining chip in Trump's arsenal. ®

Nvidia says Anthropic is telling 'tall tales' in its defense of U.S. AI chip restrictions on China

"American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters,' " a spokesperson for Nvidia said. Anthropic, the AI startup backed by billions from Amazon, argued for tighter controls and enforcement, saying in a blog post Wednesday that Chinese smuggling tactics involved chips hidden in "prosthetic baby bumps" and "packed alongside live lobsters." Chip restrictions from former President Joe Biden's term, called the "AI Diffusion Rule," are set to take effect May 15. The rule puts global export controls on advanced AI chips and model weights to prevent rival nations like China from gaining ground in an escalating AI arms race.

Nvidia denies chip-smuggling reports involving fake pregnancies and live lobsters

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. WTF?! Nvidia has denied that its chips have been smuggled into China using bizarre methods, including hiding them in fake pregnant bellies or alongside live lobsters. However, Chinese customs have documented these exact cases, complete with photographic evidence. Nvidia's rant was aimed at AI startup Anthropic, which has been clashing with Team Green over the AI Diffusion Rules that are set to take effect on May 15. The rules restrict the export of advanced AI technologies, particularly AI chips and high-capability models (those trained with over 10²⁶ FLOPs). Nvidia wants to keep selling its expensive GPUs to China, while Anthropic, which uses the company's hardware for its operations, wants to keep them in the US to ensure a steady supply and fewer competitors. The Amazon-backed company has suggested lowering the export threshold for Tier 2 countries, implementing stricter regulations to minimize smuggling risks, and boosting funding for enforcement efforts. "Maintaining America's compute advantage through export controls is essential for national security and economic prosperity," Anthropic wrote. The company also cited the arrest of two people in 2023 by Hong Kong customs officers who were trying to smuggle 70 high-end "computer display cards" into the country alongside 617 pounds of lobsters, and the famous incident in which a woman was caught entering China with 202 Intel CPUs wrapped around her torso and concealed underneath a prosthetic pregnant belly. Nvidia was, unsurprisingly, less than pleased by Anthropic's criticism. A spokesperson told CNBC that "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters.'" "Get your graphics cards and live lobsters right here" It's confusing why the spokesperson would consider the reports to be tall tales, especially as there are photos from these incidents of the smugglers' hauls. Maybe they'd argue that the woman with the pregnant belly was hiding iPhones and Intel CPUs, not Nvidia chips? Nvidia's spokesperson added that the policy should not be used to limit competitiveness. They said China has half the world's AI researchers and highly capable experts at every layer of the AI stack. "America cannot manipulate regulators to capture victory in AI," the spokesperson said. "Anthropic stands by its recently filed public submission in support of strong and balanced export controls that help secure America's lead in infrastructure development and ensure that the values of freedom and democracy shape the future of AI," a company spokesperson said in a statement. Nvidia CEO Jensen Huang visited Beijing last month at the invitation of a Chinese trade organisation. He said that China was a very important market for Nvidia and later warned that the country is "not behind" the US in AI. He also praised the progress being made by Huawei.

Nvidia says Anthropic is telling 'tall tale' in its defense of U.S. AI chip restrictions on China

Nvidia blasted Anthropic Thursday in a rare public clash over artificial intelligence policy with U.S. chip export restrictions set to take effect. "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters,' " a spokesperson for Nvidia said. Anthropic, the AI startup backed by billions from Amazon, argued for tighter controls and enforcement, saying in a blog post Wednesday that Chinese smuggling tactics involved chips hidden in "prosthetic baby bumps" and "packed alongside live lobsters." Chip restrictions from former President Joe Biden's term, called the "AI Diffusion Rule," are set to take effect May 15. The rule puts global export controls on advanced AI chips and model weights to prevent rival nations like China from gaining ground in an escalating AI arms race. President Donald Trump is reportedly working on updating these restrictions, adding another layer of uncertainty to the already contentious policy. Anthropic, which relies heavily on Nvidia hardware to train its models, is calling for tighter restrictions that could limit Nvidia's overseas business and revenue from chip sales. Anthropic argued that compute access is the key strategic chokepoint in the race to build frontier AI. The company proposed lowering the export threshold for Tier 2 countries, tightening the rules to reduce smuggling risks, and increasing funding for enforcement. "Maintaining America's compute advantage through export controls is essential for national security and economic prosperity," Anthropic wrote. In a sharply worded response to Anthropic, an Nvidia spokesperson blasted the use of policy to limit competitiveness. "China, with half of the world's AI researchers, has highly capable AI experts at every layer of the AI stack. America cannot manipulate regulators to capture victory in AI," the spokesperson said. Nvidia CEO Jensen Huang, who visited with Chinese trade officials in mid-April, said Wednesday in Washington, D.C. that China is "not behind" the U.S. in AI and praised Huawei as a top global tech company. "They're incredible in computing and network technology, all these essential capabilities to advance AI," Huang said. "They have made enormous progress in the last several years."

Nvidia denies 'tall tales' that chips are being smuggled in fake baby bumps and alongside live lobsters

This is just weeks before the implementation of the AI Diffusion Rule. Nvidia and AI firm Anthropic are currently embroiled in a back-and-forth around claims the former's chips are being smuggled into China, and the concerns that smuggling raises. Where Anthropic cites a systemic problem, Nvidia argues Anthropic is telling "tall tales". In a recent blog post, Anthropic warned of the 'major threat' that is chip smuggling. It claims China has "established sophisticated smuggling operations, with documented cases involving hundreds of millions of dollars worth of chips". This leads Anthropic to argue that export enforcement needs increased funding, and that the tier system introduced in the 'AI Diffusion Rule' needs adjusting to allow tier 2 countries better access to technology, alongside more lenient rules for tier 2 countries. Effectively, the AI Diffusion Rule, which takes effect on May 15, would prioritise allies of America for the control of advanced AI chips, and any chips being smuggled into China would subvert the aims of that rule. For some context on those specific methods for smuggling, a woman was caught after smuggling 200 CPUs in a prosthetic belly back in 2022. Then, in 2023, two men were found smuggling GPUs into China alongside live lobsters. These aren't just random claims on behalf of Anthropic, it's citing previous cases of smuggling. Nvidia, however, told CNBC, "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters". Given the antagonism between America and China regarding advancement in AI (as shown by the likes of DeepSeek), Anthropic, as an American AI company, has an investment in America being the dominant leader in AI growth. As cited at the bottom of Anthropic's blog post, Anthropic's leaders have previously argued America's "shared security, prosperity and freedoms hang in the balance", in regards to wider AI support and adoption. On the way to a recent White House event Jen-Hsun Huang has spoken about the need to "accelerate the diffusion of American AI technology around the world." That's Nvidia's CEO arguing for getting more 'American' AI chips out into different territories, which could kinda be on the same side of the argument as Anthropic. Especially as he also later stated that: "China is right behind us," which is also seemingly leaning into that whole secure nationhood stuff, too. This is one step in a large argument made by companies concerning their competition with China. Just a few months ago, OpenAI argued it should be allowed to scrape copyrighted content as it would lose out to China otherwise. Anthropic, like many other major AI companies, is reliant on the hardware of Nvidia to operate in wider AI workloads. The examples it brings up are from chip smugglers in the last few years, but it doesn't argue that these specific examples are how smugglers are beating detection right now. In this sense, Anthropic is broadly gesturing at a perceived problem with smuggling to justify tightening restrictions and enforcement in light of the Diffusion Rule. Nvidia is hand-waving that concern with its response, but the incredulity in the messaging does seem a tad strange, given these were previously successful smuggling techniques, albeit not specifically of Nvidia products. Anthropic has not given any evidence of any relevant or ongoing smuggling techniques as of the time of writing.

NVIDIA, Anthropic Clash Over Chip Export Controls: Report | AIM

Besides, the Trump administration is planning to further strengthen chip controls, as per reports. Anthropic, the AI startup that develops the Claude family of models, suggested reccomendations in a blog post on Wednesday to the United States government to strengthen controls on chip exports. Nonetheless, NVIDIA, the leading developer of AI chips and hardware, has firmly opposed Anthropic's statements, according to CNBC. In the blog post, Anthropic outlined several recommendations for the U.S. Department of Commerce, arguing that enhanced export controls could strengthen a technological edge considered vital for the U.S. to compete with China. Anthropic recommends adjusting chip access tiers for countries, lowering no-license purchase limits to curb smuggling, and increasing funding, and resources for export control enforcement to enhance effectiveness. For instance, Anthropic has suggested decreasing the GPU export limit NVIDIA can make to certain nations without government authorisation, expressing concerns about potential smuggling. However, an NVIDIA spokesperson told CNBC that "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters." The spokesperson also added that the U.S. cannot be successful in the AI race by manipulating regulators, stating that China is home to 'half of the world's AI researchers' and has 'highly capable' experts in every aspect of the AI stack. NVIDIA CEO Jensen Huang also resonates with the sentiment, and recently said that China is not behind the U.S in the AI race. The above argument revolves around a rule implemented by former U.S. President Joe Biden in January - which comes into effect on May 15, 2025. It is called 'The Framework for Artificial Intelligence Diffusion', which categorises nations into three levels according to the security threats they pose to the U.S. These categories dictate the application of export controls. The first tier, including 17 countries and Taiwan, can get unlimited AI chips. Around 120 countries fall into the second tier, where chip access is limited. Exports are prohibited to the third group, consisting of countries like China, Russia, Iran, and North Korea. Companies can import up to 1,700 GPUs, valued at around $40-50 million, without needing a licence, to countries classified in the 'Tier 2' bracket. However, larger imports, worth up to $1 billion, will require a licence review. Recently, Reuters reported that the current Trump administration is planning to remove the tier system to control exports. This could be replaced with a 'global licensing regime with government-government agreements', as per the sources cited by Reuters. The report also adds that the threshold of 1,700 NVIDIA GPUs could also be lowered to 500.

Anthropic AI Company Claims NVIDIA Chips Smuggled in Lobsters

NVIDIA found itself at the center of an unusual controversy involving accusations that its AI chips were being smuggled into China inside live lobsters. This claim was made by Anthropic, an AI startup supported by Amazon. Anthropic, which depends on NVIDIA's hardware for training its AI models, is pushing for stricter enforcement of export controls on AI technology. According to Anthropic, the smuggling of chips in such a bizarre way could undermine the US's position in the global AI race. This incident comes at a time when the US government is about to enforce the "AI Diffusion Rules," which aim to prevent the export of advanced AI chips to countries like China. These regulations, set to take effect on May 15, 2025, are part of an effort to limit China's ability to develop advanced AI capabilities, particularly for military purposes. The rules are seen as crucial for preserving the US's technological and economic leadership in AI development. In response to these allegations, NVIDIA has strongly denied any involvement in such smuggling activities. The company dismissed the idea of AI chips being hidden inside lobsters as unrealistic and exaggerated. NVIDIA urged companies to focus on innovation rather than spreading unfounded rumors. While the new AI export rules are expected to have significant implications for the global AI market, both companies are closely following the situation, as the US continues to tighten its control over AI technology exports. Source: ithome

NVIDIA responds to claims GPUs are smuggled into China in 'baby bumps'

As an Amazon Associate, we earn from qualifying purchases. TweakTown may also earn commissions from other affiliate partners at no extra cost to you. After arguing for tighter restrictions and control on US chip exports, Anthropic has been publicly criticized by NVIDIA, the company leading the graphics card market by a wide margin, which responded to Anthropic's claims by calling them "tall tales." Anthropic, an AI startup that is backed by billions of dollars from Amazon, said on Wednesday that Chinese smuggling tactics for GPUs are becoming more sophisticated, and that banned AI GPUs are entering the country "alongside live lobsters" and within "prosthetic baby bumps." The AI startup claims China has established highly sophisticated smuggling operations that enable hundreds of millions of dollars worth of banned US-exported processors to enter the country, hence Anthropic's stance to improve restrictions and control around what processors are exported from the US. NVIDIA has since responded to these claims, with a spokesperson saying the AI startup is telling "tall tales" and the company should "focus on innovation and rise to the challenge," rather than "tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters." Anthropic calling for tighter export restrictions could limit NVIDIA's overseas business, which is already currently up in the air as chip restrictions implemented during President Joe Biden's term under the "AI Diffusion Rule" are scheduled to come into effect on May 15. The new rules add new guidelines to global export controls on advanced AI chips and model weights with the overall goal to prevent rival nations from gaining a leg up in the exponentially growing AI arms race. President Trump is also set to update these restrictions, throwing more uncertainty on NVIDIA's current and future position in the global AI chip market.

Nvidia fires back at Anthropic over AI chip export rules

Nvidia has responded to Anthropic's support for U.S. export controls on AI chips, expressing disagreement with the proposed restrictions. On Wednesday, Anthropic backed the U.S. Department of Commerce's "Framework for Artificial Intelligence Diffusion," which would impose AI chip export restrictions starting May 15. A day later, Nvidia's spokesperson countered Anthropic's claims about AI chip smuggling, stating that American firms should focus on innovation rather than making unsubstantiated claims. The spokesperson referenced Anthropic's assertions that large AI chips are being smuggled into countries like China in unusual ways, such as hidden in "baby bumps" or alongside live lobsters. Nvidia's spokesperson further emphasized that China has highly capable AI experts and a significant number of the world's AI researchers, suggesting that the U.S. cannot rely on regulatory manipulation to gain an advantage in AI. Export restrictions could impact Nvidia's global revenue, particularly given that new licensing requirements for its H20 AI chips sold in China could cost the company $5.5 billion in Q1 of its 2026 fiscal year. Nvidia's told TechCrunch: "China, with half of the world's AI researchers, has highly capable AI experts at every layer of the AI stack. America cannot manipulate regulators to capture victory in AI."

Nvidia Slams Amazon-Backed Anthropic Over Support For Stricter China Chip Bans, Mocks 'Tall Tales' Of Smuggling With Live Lobsters And 'Baby Bumps' - Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN)

On Thursday, in a rare and sharp public clash, NVIDIA Corp. NVDA targeted artificial intelligence startup Anthropic, which is backed by Amazon.com, Inc. AMZN and Alphabet Inc. GOOG GOOGL for supporting tighter U.S. restrictions on AI chip exports to China. What Happened: Nvidia slammed Anthropic following the startup's blog post urging stricter enforcement of U.S. chip export controls. Anthropic stated that AI chips have been smuggled into China hidden in "prosthetic baby bumps" and "packed alongside live lobsters," reported CNBC. The post cited the 2022 arrest of a woman caught transporting chips and a 2023 seizure involving computer display cards found in a lobster shipment in Hong Kong. See Also: Nvidia's Jensen Huang Meets Japanese PM To Discuss AI's Growing Energy Needs "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters,'" a spokesperson for Nvidia said in a statement, according to the report. A spokesperson for Anthropic responded to Nvidia's criticism, saying the company "stands by its recently filed public submission in support of strong and balanced export controls that help secure America's lead in infrastructure development and ensure that the values of freedom and democracy shape the future of AI," the report added. Why It's Important: On the same day, Nvidia CEO Jensen Huang reportedly told U.S. lawmakers that current AI chip export restrictions could be unintentionally giving China's Huawei Technologies a stronger position in the global race for AI dominance. Get StartedStart Futures Trading Fast -- with a $200 Bonus Join Plus500 today and get up to $200 to start trading real futures. Practice with free paper trading, then jump into live markets with lightning-fast execution, low commissions, and full regulatory protection. Get Started Last month, the U.S. government blocked Nvidia from selling its H20 chip -- a product specifically tailored for the Chinese market -- shortly after initial shipments had begun. As a result, Nvidia expects to incur a $5.5 billion hit in the first quarter ending April 27, related to inventory and purchase obligations for the now-restricted chip. Price Action: Nvidia shares rose 2.47% on Thursday, closing at $111.61, according to Benzinga Pro. Benzinga Edge Stock Rankings gives Nvidia a strong growth score of 94.78%. Click here to see how it compares to other leading tech stocks. Read More: 'Most People Don't Have The B**ls To Do It,' Says Mark Cuban, Praising Musk For Going 'All In' With His Own Money For His Startups Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AMZNAmazon.com Inc$185.98-2.22%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum64.44Growth94.08Quality73.76Value49.42Price TrendShortMediumLongOverviewGOOGAlphabet Inc$164.441.01%GOOGLAlphabet Inc$162.790.92%NVDANVIDIA Corp$112.720.99%Market News and Data brought to you by Benzinga APIs

NVIDIA's Chips Have Apparently Been Smuggled To China Through Live Lobsters & Other "Shady" Techniques, Claims Amazon-Backed Anthropic

The US-based AI firm Anthropic has criticized NVIDIA's stance on the AI Diffusion rule, claiming that Team Green's shipments to China should be "reviewed carefully". Anthropic Says NVIDIA's Opposition To the AI Diffusion Rule Comes From Their Business In China, Which Involves "AI Chip" Smuggling There have been many debates around the US AI Diffusion rule since the Biden administration initially announced the policy. NVIDIA showed the most resentment towards it, mainly due to its attachment to the Chinese markets. Interestingly, the famous AI firm Anthropic seems highly against a policy revision of the AI Diffusion rule, implying that the ultimate benefit of switching up the terms will favour China in the AI race. They also made some comments about NVIDIA's business with China as well, and to our surprise, Team Green was quick enough to respond. China has established sophisticated smuggling operations, with documented cases involving hundreds of millions of dollars worth of chips. In some cases, smugglers have employed creative methods to circumvent export controls, including hiding processors in prosthetic baby bumps and packing GPUs alongside live lobsters. Chinese firms continue to establish shell companies in third countries at a rapid pace to evade export controls. - Anthropic We have reported on GPU smuggling incidents in China several times now, involving unique incidents that were mostly associated with consumer PC hardware products, but in terms of AI chips alone, Anthropic has made some interesting claims. They believe that individuals are smuggling NVIDIA's high-end chips to China by packing GPUs alongside live lobsters, although we are not sure how that would work out. But yeah, given how the US has managed to control chip supply to China by regulating exports, the nation does seem to take desperate measures. The comments from Anthropic clearly depict that the firm is in favor of a "tiered system." In fact, they want the US administration to further tighten its control over chip supply by lowering the chip threshold that can be exported to nations. After Anthropic's statement, NVIDIA was quick enough to respond, claiming that AI firms should focus on building American businesses rather than telling tales to the public. American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters. - NVIDIA via CNBC We didn't see American firms battling over a policy coming our way, but it seems like the evolving geopolitical situation has them frustrated. For now, the AI Diffusion policy is set to be implemented by May 15, and it is likely that we will see an announcement on this rule soon.

Nvidia Accuses Anthropic of Spinning 'Tall Tales' About Chip Restrictions | PYMNTS.com

Nvidia has reportedly criticized Anthropic over its stance on U.S. chip export restrictions. "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters,'" a spokesperson for Nvidia told CNBC Thursday (May 1). Nvidia's comments refer to a recent blog post by artificial intelligence (AI) startup Anthropic, which accused China of engaging in the above-mentioned smuggling tactics. "The first Trump Administration correctly diagnosed that AI will be central to strategic competition with China, and that the United States can and should use export controls to maintain and strengthen its AI leadership," Anthropic wrote. "While the U.S. still maintains a lead in AI development, Chinese AI labs like DeepSeek have made significant progress, using chips obtained before export controls went into effect, and underscore the importance of strong export controls on advanced chips." As CNBC noted, the chip restrictions were set during the final days of President Joe Biden's tenure and are set to go into effect May 15. These limits, known as the "Diffusion Rule," are designed to place export controls on advanced AI chips and model weights to prevent countries like China from advancing in the AI race. "To enhance U.S. national security and economic strength, it is essential that we do not offshore this critical technology and that the world's AI runs on American rails," the Biden administration said at the time. "It is important to work with AI companies and foreign governments to put in place critical security and trust standards as they build out their AI ecosystems." President Donald Trump, the CNBC report added, is working on revising these restrictions, bringing additional uncertainty to an already contentious rule. A group of Senate Republicans last month wrote to the White House asking Trump to rescind his predecessor's rule, saying it could hinder domestic innovation and disrupt existing international partnerships. "Every day this rule remains in place, American companies face mounting uncertainty, stalled investments, and the risk of losing critical global partnerships that cannot be easily regained," the group's letter said. Anthropic wants the government to impose greater restrictions on imports, something that could curb Nvidia's revenue. "China, with half of the world's AI researchers, has highly capable AI experts at every layer of the AI stack. America cannot manipulate regulators to capture victory in AI," the spokesperson told CNBC.