U.S. Considers Capping AI Chip Exports to Middle East, Raising Concerns for Nvidia and AMD

Can a Potential Chip Cap Slow Nvidia Down? | The Motley Fool

Semiconductor stocks, including Nvidia (NVDA 0.78%), took a slight breather after it was reported that the Biden administration was considering a chip export cap on advanced semiconductors to certain countries. However, it was just a slight pause in Nvidia stock's strong upward trajectory. With Nvidia seeing strong momentum, could an export cap slow down the company in any way? Let's take a closer look at the proposed chip cap and the potential impact it could have on the stock. According to a report from Bloomberg, the Biden administration is considering putting restrictions on the sales of some advanced chips by capping sales to certain countries. It would do this by limiting export licenses to these countries due to national security concerns. The countries in question appear to be largely from the Middle East. In a bit of irony, the report comes shortly after the Commerce Department eased rules to allow the Middle East easier access to advanced AI chips. Saudi Arabia has been at the forefront of building out data centers in the region, with The New York Times reporting earlier this year that the country targeted investing $40 billion in artificial intelligence (AI) technology in the coming years. Given Saudi Arabia's huge amount of associated natural gas and growing stand-alone production, the country has the resources to provide cheap power to AI-hungry data centers, so its ambitions make sense. Earlier this year, the U.S. government banned the sales of Nvidia's newest graphics processing units (GPUs) to some countries in the Middle East, and it already has export bans linked to other countries such as China and Russia. Some countries in the region have also been accused of sending shipments to Russia. The U.S. wants to be the world's AI leader, so it does make some sense from a national security perspective for the government to want to limit the sales of advanced AI chips to certain countries. Nvidia is the leading-advanced chipmaker in the world, as its GPUs have become the backbone of the infrastructure that powers AI-focused data centers. Thus, anything that limits the sales of advanced chips could impact it. Meanwhile, the Middle East has been one of the fastest-growing data-center regions in the world. Much like how major U.S. tech companies have been racing to build out data centers to gain AI supremacy, so too have Saudi Arabia and the United Arab Emirates (UAE). At the same time, large cloud providers have also turned to the region. Earlier this year, Amazon struck a deal with Saudi Arabia to build data centers in the kingdom that are expected to come online in 2026. Overall, Amazon is looking at investing over $5 billion in the projects, which will help run workloads for local companies. Alphabet and Microsoft are also active in the region, with the latter helping build out the UAE's sovereign cloud network. Demand for Nvidia's GPUs is so robust that the company would likely see very little impact over the near-to-medium term if a chip cap to Middle Eastern countries were enacted. The reason is that anything targeted to be shipped to the Middle East would likely be quickly scooped up by other parties. Large U.S. tech companies and well-funded AI start-ups, such as OpenAI and xAI, continue to have an insatiable demand for Nvidia's GPUs as they race to build out their AI infrastructure. Capital expenditures related to AI infrastructure continue to rise, while leaders in the space, such as Alphabet and Meta Platforms, have said that their biggest risk related to AI is underinvesting. With large language models (LLMs) needing more and more compute power, and hence GPUs, to be trained on, Nvidia is still scrambling just to keep up with demand. Meanwhile, while a chip cap could impact shipments to the region, these countries would still need chips for their AI ambitions, and there is a possibility that Nvidia would be able to sell less advanced chips or slightly older technology to the region to help fill the gap. With the company accelerating its design cycle to once a year, it's possible it would be allowed to sell its current Hopper chips to the region in a couple of years when its Rubin chip would be the latest and greatest chip technology. Nvidia has also developed AI chips specifically designed for certain markets like China that are permissible under export rules. This is another option in the future. For the time being, though, Nvidia's focus will be on its most advanced chips. Given the current demand for Nvidia's chips and comments from its largest customers, the stock remains a buy, as not even a chip cap will get in its way.

US weighs capping exports of AI chips from Nvidia and AMD to some countries

By Mackenzie Hawkins, Bloomberg News The Tribune Content Agency Biden administration officials have discussed capping sales of advanced AI chips from Nvidia Corp. and other American companies on a country-specific basis, people familiar with the matter said. The approach would set a ceiling on export licenses for certain countries in the interest of national security, according to the people, who described the private discussions on condition of anonymity. Officials are focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them, the people said. Deliberations are in early stages and remain fluid, the people said, noting that the idea has gained traction in recent weeks. The policy would build on a new framework to ease the licensing process for AI chip shipments to data centers in places like the United Arab Emirates and Saudi Arabia. Commerce Department officials unveiled those regulations last month and said there are more rules coming. The agency's Bureau of Industry and Security, which oversees export controls, declined to comment. Nvidia, the market leader for AI chips, also declined to comment, as did Advanced Micro Devices Inc. A representative for Intel Corp., which also makes such processors, didn't respond to a request for comment. Nvidia shares fell more than 1.5% in early trading Tuesday, after the stock's record close on Monday. A spokesperson for the White House National Security Council declined to comment on the talks but pointed to a recent joint statement by the U.S. and UAE on artificial intelligence. In it, the two countries acknowledged the "tremendous potential of AI for good," as well as the "challenges and risks of this emerging technology and the vital importance of safeguards." Setting country-based caps would tighten restrictions that originally targeted China's ambitions in artificial intelligence, as Washington considers the security risks of AI development around the world. Already, the Biden administration has restricted AI chip shipments by companies like Nvidia and AMD to more than 40 countries across the Middle East, Africa and Asia over fears their products could be diverted to China. At the same time, some U.S. officials have come to view semiconductor export licenses, particularly for Nvidia chips, as a point of leverage to achieve broader diplomatic goals. That could include asking key companies to reduce ties with China to gain access to U.S. technology - but the concerns extend beyond Beijing. "We will have to have a conversation with countries around the world about how they plan to use these capabilities," Tarun Chhabra, senior director of technology at the National Security Council, said at a forum in June without naming specific nations. "If you're talking about countries that have a really robust internal surveillance apparatus, then we have to think about: How exactly will they use these capabilities to supercharge that kind of surveillance, and what will that look like?" There's also the question of how global AI development could affect American intelligence operations, said Maher Bitar, another NSC official. "What are the risks not just on human rights grounds, but also in terms of the security and the counterintelligence risks to our personnel around the world?" Bitar said at the same event. It's unclear how leading AI chipmakers would react to additional U.S. restrictions. When the Biden administration first issued sweeping chip regulations for China, Nvidia redesigned its AI offerings to ensure it can keep selling into that market. If the administration moves forward with country-based caps, it may prove difficult to deliver a comprehensive new policy in the final months of President Joe Biden's term. Such rules could be challenging to enforce and would be a major test of U.S. diplomatic relationships. Governments around the world are in a quest for so-called sovereign AI - the ability to build and run their own AI systems - and that pursuit has become a key driver of demand for advanced processors, according to Nvidia Chief Executive Officer Jensen Huang. Nvidia's chips are the gold standard for data-center operators, making the company the world's most valuable chipmaker and the top beneficiary of the AI boom. China, meanwhile, is working to develop its own advanced semiconductors, though they still trail the best American chips. Still, there's concern among U.S. officials that if Huawei Technologies Co. or another foreign maker one day offers a viable alternative to Nvidia chips - presumably with fewer strings attached - that could weaken the U.S. ability to shape the global AI landscape. Some U.S. officials argue that's only a distant possibility, and that the Washington should adopt a more restrictive approach to global AI chip exports given its current negotiating position. Others warn against making it too difficult for other countries to buy American technology, in the event China gains ground and captures those customers. While officials have debated the best approach, they've slowed high-volume AI chip license approvals to the Middle East and elsewhere. But there are signs things could get moving soon: Under the new rules for shipments to data centers, U.S. officials will vet and preapprove specific customers based on security commitments from both the companies and their national governments, paving the way for easier licensing down the road. (With assistance from Ian King and Jenny Leonard.)

Nvidia, AMD Face Chip Export Curbs, As Biden Administration Considers Restrictions On Middle-East Countries, Others: Report - NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD)

The Joe Biden administration is reportedly considering restricting the export of advanced AI chips from Nvidia Corporation NVDA and Advanced Micro Devices Inc. AMD to specific countries. What Happened: The proposal which hasn't been finalized yet aims to limit the AI capabilities of certain nations, citing national security concerns, with a focus on Persian Gulf countries, reported Bloomberg, citing people familiar with the matter. The development comes following the introduction of the framework that intends to streamline the licensing process for AI chip shipments to data centers in regions such as the UAE and Saudi Arabia. See Also: Nvidia CEO Jensen Huang Praises Elon Musk For Achieving Something With xAI In 19 Days That Usually Takes At Least A Year: 'Singular In His Understanding Of Engineering' If finalized, these caps would strengthen restrictions initially aimed at curbing China's ambitions in AI. The Biden administration has already limited AI chip exports from companies such as Nvidia and AMD to over 40 nations across the Middle East, Africa, and Asia due to concerns that the technology could be redirected to China. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: Previously, it was reported that despite U.S. semiconductor sanctions, Nvidia's AI chips continue to find their way into Chinese markets through smuggling and other channels. Meanwhile, China has pushed for local AI chips including those made by companies like Huawei Technologies, in retaliation against the U.S. sanctions. These efforts could impact Nvidia's GPU sales. On Monday, Nvidia's stock reached an all-time high. The stock climbed 2.9%, surpassing $138.71, after its prior record close of $135.58 set in June. The AI chip giant currently has a market cap of $ 3.386, making it the second most valuable company in the world after Apple Inc. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Nvidia's Jensen Huang Says ChatGPT Led To 'Awakening Of AI,' Praises Sam Altman's OpenAI As One Of Most Consequential Companies Of Our Time Market News and Data brought to you by Benzinga APIs

The AI chip war could see the U.S. cap exports of Nvidia and AMD chips

The U.S. reportedly could cap sales of advanced artificial intelligence chips from U.S.-based chipmakers to certain countries, including those in the Middle East. Biden administration officials in recent weeks have discussed putting a ceiling on export licenses for advanced AI chips, including those from Nvidia (NVDA) and Advanced Micro Devices (AMD), citing national security concerns, Bloomberg reported citing unnamed people familiar with the matter. The Biden administration's focus is reportedly on countries in the Middle East that have started pouring billions into AI data centers. A ceiling on export licenses would follow the Commerce Department's recent expansion of its license exceptions to include data centers. The license exception makes it easier for U.S. companies to send AI chips to countries building data centers in the Middle East. Earlier this year, U.S. officials started slowing down the issuing of licenses to Nvidia, AMD, and other U.S. chipmakers for shipping large-scale AI accelerators to the Middle East, Bloomberg reported. U.S. officials were also reportedly carrying out a national security review of AI technology being developed in the region. Nvidia and the Commerce Department's Bureau of Industry and Security, which is responsible for export controls, both declined Quartz's request for comment. AMD did not immediately respond to a request for comment. In June, Saudi Arabia announced its National Semiconductor Hub to develop semiconductor companies that can design new chips. The kingdom said it wants to attract 50 firms to Saudi Arabia by 2030. However, the hub is currently focused on simple chips, not advanced chips for AI and military technology, Bloomberg reported. Saudi Arabia's Public Investment Fund, which has investments in U.S. tech startups, has set aside $40 billion to invest in AI technology, the New York Times reported earlier this year. The fund is reportedly working with top U.S. investors, including Andreessen Horowitz.

US Weighs Capping Exports of AI Chips From Nvidia, AMD to Some Countries

Some US officials argue that Washington should adopt a more restrictive Biden administration officials have discussed capping sales of advanced AI chips from Nvidia and other American companies on a country-specific basis, people familiar with the matter said, a move that would limit some nations' Artificial Intelligence (AI) capabilities. The new approach would set a ceiling on export licenses for certain countries in the interest of national security, according to the people, who described the private discussions on condition of anonymity. Officials are focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them, the people said. Deliberations are in early stages and remain fluid, the people said, noting that the idea has gained traction in recent weeks. The policy would build on a new framework to ease the licensing process for AI chip shipments to data centers in places like the United Arab Emirates and Saudi Arabia. Commerce Department officials unveiled those regulations last month and said there are more rules coming. The agency's Bureau of Industry and Security, which oversees export controls, declined to comment. Nvidia, the market leader for AI chips, also declined to comment, as did Advanced Micro Devices. A representative for Intel, which also makes such processors, didn't respond to a request for comment. A spokesperson for the White House National Security Council declined to comment on the talks but pointed to a recent joint statement by the US and UAE on artificial intelligence. In it, the two countries acknowledged the "tremendous potential of AI for good," as well as the "challenges and risks of this emerging technology and the vital importance of safeguards." Setting country-based caps would tighten restrictions that originally targeted China's ambitions in Artificial Intelligence (AI), as Washington considers the security risks of AI development around the world. Already, the Biden administration has restricted AI chip shipments by companies like Nvidia and AMD to more than 40 countries across the Middle East, Africa and Asia over fears their products could be diverted to China. At the same time, some US officials have come to view semiconductor export licenses, particularly for Nvidia chips, as a point of leverage to achieve broader diplomatic goals. That could include asking key companies to reduce ties with China to gain access to US technology -- but the concerns extend beyond Beijing. "We will have to have a conversation with countries around the world about how they plan to use these capabilities," Tarun Chhabra, senior director of technology at the National Security Council, said at a forum in June without naming specific nations. "If you're talking about countries that have a really robust internal surveillance apparatus, then we have to think about: How exactly will they use these capabilities to supercharge that kind of surveillance, and what will that look like?" There's also the question of how global AI development could affect American intelligence operations, said Maher Bitar, another NSC official. "What are the risks not just on human rights grounds, but also in terms of the security and the counterintelligence risks to our personnel around the world?" Bitar said at the same event. It's unclear how leading AI chipmakers would react to additional US restrictions. When the Biden administration first issued sweeping chip regulations for China, Nvidia redesigned its AI offerings to ensure it can keep selling into that market. If the administration moves forward with country-based caps, it may prove difficult to deliver a comprehensive new policy in the final months of President Joe Biden's term. Such rules could be challenging to enforce and would be a major test of US diplomatic relationships. Governments around the world are in a quest for so-called sovereign AI -- the ability to build and run their own AI systems -- and that pursuit has become a key driver of demand for advanced processors, according to Nvidia Chief Executive Officer Jensen Huang. Nvidia's chips are the gold standard for data-center operators, making the company the world's most valuable chipmaker and the top beneficiary of the AI boom. China, meanwhile, is working to develop its own advanced semiconductors, though they still trail the best American chips. Still, there's concern among US officials that if Huawei Technologies Co. or another foreign maker one day offers a viable alternative to Nvidia chips -- presumably with fewer strings attached -- that could weaken the US ability to shape the global AI landscape. Some US officials argue that's only a distant possibility, and that the Washington should adopt a more restrictive approach to global AI chip exports given its current negotiating position. Others warn against making it too difficult for other countries to buy American technology, in the event China gains ground and captures those customers. While officials have debated the best approach, they've slowed high-volume AI chip license approvals to the Middle East and elsewhere. But there are signs things could get moving soon: Under the new rules for shipments to data centers, US officials will vet and preapprove specific customers based on security commitments from both the companies and their national governments, paving the way for easier licensing down the road.

US mulls capping Nvidia AI chips exports to some countries, Bloomberg News reports

Oct 14 (Reuters) - U.S. officials have discussed limiting sales of advanced AI chips from Nvidia (NVDA.O), opens new tab and other American companies on a country-specific basis, Bloomberg News reported on Monday, citing people familiar with the matter. The United States is focused on Persian Gulf countries, the report said, adding that this new approach would set a ceiling on export licenses for some countries in the interest of national security. Advertisement · Scroll to continue The idea has gained traction in recent weeks and deliberations are in early stages and remain fluid, according to Bloomberg. The U.S. Commerce Department and Nvidia declined to comment, while Intel and AMD did not immediately respond to Reuters' requests for comment. The Commerce Department unveiled a rule last month that could ease shipments of artificial intelligence chips like those from Nvidia to data centers in the Middle East. Advertisement · Scroll to continue Under the rule, data centers will be able to apply for Validated End User status that will allow them to receive chips under a general authorization, rather than requiring their U.S. suppliers to obtain individual licenses to ship to them. Last year, the Biden administration announced measures to expand licensing requirements for exports of advanced chips to more than 40 countries, including some in the Middle East, that presented risks of diversion to China and were subject to U.S. arms embargoes. Reporting by Shivani Tanna in Bengaluru; Editing by Alan Barona and Subhranshu Sahu Our Standards: The Thomson Reuters Trust Principles., opens new tab

US mulls capping Nvidia AI chips exports to some countries, Bloomberg News reports

(Reuters) - U.S. officials have discussed limiting sales of advanced AI chips from Nvidia and other American companies on a country-specific basis, Bloomberg News reported on Monday, citing people familiar with the matter. The United States is focused on Persian Gulf countries, the report said, adding that this new approach would set a ceiling on export licenses for some countries in the interest of national security. The idea has gained traction in recent weeks and deliberations are in early stages and remain fluid, according to Bloomberg. The U.S. Commerce Department and Nvidia declined to comment, while Intel and AMD did not immediately respond to Reuters' requests for comment. The Commerce Department unveiled a rule last month that could ease shipments of artificial intelligence chips like those from Nvidia to data centers in the Middle East. Under the rule, data centers will be able to apply for Validated End User status that will allow them to receive chips under a general authorization, rather than requiring their U.S. suppliers to obtain individual licenses to ship to them. Last year, the Biden administration announced measures to expand licensing requirements for exports of advanced chips to more than 40 countries, including some in the Middle East, that presented risks of diversion to China and were subject to U.S. arms embargoes. (Reporting by Shivani Tanna in Bengaluru; Editing by Alan Barona and Subhranshu Sahu)

US weighs limit on Nvidia, AMD AI chip sales to some countries- Bloomberg By Investing.com

Investing.com-- The Biden administration is weighing a limit on sales of artificial intelligence chips made by NVIDIA Corporation (NASDAQ:NVDA) and AMD (NASDAQ:AMD) on a per-country basis, Bloomberg reported on Monday. Officials discussed imposing limited export licenses on some countries, likely cutting off their exposure to advancements in AI technology, the Bloomberg report said. The restrictions are being considered in the interest of national security, and are focused on countries in the Middle East and Persian Gulf. It was not clear whether the restrictions would be imposed during President Joe Biden's term. The potential sales impact of any restrictions was also not immediately clear. The U.S. already has restrictions in place for AI chip sales to China, citing concerns over national security. The restrictions were imposed over the past year, amid the growing popularity of generative AI programs. While Nvidia still supplies some AI chips to China, they are made specifically with U.S. export restrictions in mind, and are specced lower than the company's flagship AI chips. Interest in AI investment has been growing among Gulf countries, particularly in developing AI infrastructure and gaining a foothold in the fast-growing sector.

Nvidia stock falls over 4% on news that U.S. could cap exports

The chipmaker's stock was down less than 1% in pre-market trading, but fell by around 4.4% after the market open. The drop occurred following a report that the U.S. could cap sales of advanced artificial intelligence chips from U.S.-based chipmakers to certain countries. Biden administration officials in recent weeks have discussed putting a ceiling on export licenses for advanced AI chips, including those from Nvidia and rival AMD (AMD), to countries in the Middle East, citing national security concerns, Bloomberg reported. Earlier this year, U.S. officials started slowing down the issuing of licenses to Nvidia, AMD, and other U.S. chipmakers for shipping large-scale AI accelerators to the Middle East, Bloomberg reported. Meanwhile, Dell (DELL) plans to ship computer servers with Nvidia's Blackwell AI chips to select customers starting next month, with general availability slated for the start of next year, Arthur Lewis, president of Dell's infrastructure unit, told Bloomberg. Dell's rollout shows production of Nvidia's highly-anticipated Blackwell chips is on track after reports of delays earlier this year. Nvidia's shares have experienced some turbulence in recent months. In August, the chipmaker's shares fell about 13% in pre-market trading after a report that its Blackwell chips were delayed due to design flaws. Still, Nvidia's stock is up around 173% so far this year, and it remains the second-most valuable public company after Apple (AAPL). The company's shares climbed 2.4% and closed at a record $138.07 on Monday, beating its previous record close of $135.58 on June 18 -- a week after it initiated a 10-for-1 stock split. During Nvidia's second-quarter earnings in August, CEO Jensen Huang said the company had shipped samples of Blackwell chips to customers during the period and that Blackwell's production will ramp up in the fourth quarter into fiscal year 2026. To "improve production yield," Nvidia made a change to Blackwell's GPU mask, the chipmaker said. However, "there were no functional changes necessary," Huang said on a call with analysts. Earlier this month, Nvidia's stock rose after chief executive Jensen Huang said demand for Blackwell is "insane."

US Weighs Capping Exports of AI Chips From Nvidia and AMD to Some Countries

Biden administration officials have discussed capping sales of advanced AI chips from Nvidia Corp. and other American companies on a country-specific basis, people familiar with the matter said, a move that would limit some nations' artificial intelligence capabilities. The new approach would set a ceiling on export licenses for certain countries in the interest of national security, according to the people, who described the private discussions on condition of anonymity. Officials are focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them, the people said.

Chip stocks fall on ASML forecast cut, potential US AI chip export cap

U.S. semiconductor stocks declined following a sales forecast cut by ASML and reports of the Biden administration considering capping AI processor sales to certain countries. Major chip firms like Nvidia, AMD, and Intel saw significant drops, affecting market indices. The news raised concerns about U.S. efforts to maintain technological dominance.U.S. semiconductor stocks fell on Tuesday after chip equipment maker ASML cut its annual sales forecast and a report said the Biden administration was considering capping sales of advanced artificial intelligence processors to some countries. AI chip giant Nvidia fell 4.4%, retreating from a record high hit in the previous session that had put it on the brink of dethroning Apple as the world's most valuable company. Tuesday's drop was set to reduce the AI chip major's market capitalization by about $138 billion to $3.25 trillion, widening the gap with Apple's value of $3.58 trillion. Other chip firms, including AMD, Intel, Arm, Broadcom and Micron, fell between 2.3% and 6.2%, which dragged the Philadelphia SE Semiconductor Index down nearly 4% and weighed on the Nasdaq index. U.S.-listed shares of ASML were down 12% after the Dutch company published results ahead of schedule in an apparent error, reporting weak bookings, lowering forecast, and indicating slower chip demand recovery outside AI sector. "ASML's fat finger error isn't cause for concern in itself, but the content of the release didn't make comforting reading for investors," said Derren Nathan, head of equity research, Hargreaves Lansdown. Separately, Bloomberg News reported on Monday that U.S. officials have been considering implementing a cap on export licenses for AI chips to specific countries - mostly in the Persian Gulf region, citing national security concerns. Washington is increasingly concerned that the Middle East might serve as a channel for China to acquire advanced American chips that are prohibited from being directly shipped to the Asian country. "With the AI revolution expected to play such a huge part in upping productivity and enabling other technological advances it's not surprising the U.S. wants to do what it can to maintain its dominance," said Danni Hewson, head of financial analysis at AJ Bell.

US mulls capping Nvidia AI chips exports to some countries, Bloomberg News reports

A Nvidia Blackwell GPU is displayed at COMPUTEX in Taipei, Taiwan June 4. Reuters-Yonhap U.S. officials have discussed limiting sales of advanced AI chips from Nvidia and other American companies on a country-specific basis, Bloomberg News reported on Monday, citing people familiar with the matter. The United States is focused on Persian Gulf countries, the report said, adding that this new approach would set a ceiling on export licenses for some countries in the interest of national security. The idea has gained traction in recent weeks and deliberations are in early stages and remain fluid, according to Bloomberg. The U.S. Commerce Department and Nvidia declined to comment, while Intel and AMD did not immediately respond to Reuters' requests for comment. The Commerce Department unveiled a rule last month that could ease shipments of artificial intelligence chips like those from Nvidia to data centers in the Middle East. Under the rule, data centers will be able to apply for Validated End User status that will allow them to receive chips under a general authorization, rather than requiring their U.S. suppliers to obtain individual licenses to ship to them. Last year, the Biden administration announced measures to expand licensing requirements for exports of advanced chips to more than 40 countries, including some in the Middle East, that presented risks of diversion to China and were subject to U.S. arms embargoes. (Reuters)

US govt reportedly mulls capping AI GPU exports from Nvidia and AMD to the Middle East

The goal here is to regulate the dissemination of advanced AI technology. The Biden administration is reportedly weighing restrictions on AI chip exports from companies like Nvidia and AMD to the Middle East, following earlier limits on China. This move reflects concerns over advanced AI technologies' potential military and surveillance applications. AI GPUs such as Nvidia's A100 and H100 are crucial components in the development of artificial intelligence, including large-scale models and deep learning, making them a point of focus in global technological and geopolitical strategies. This potential ban would extend restrictions on chip sales to China, broadening their impact to include the Middle East. The U.S. government is increasingly concerned about the possibility of these GPUs being utilized for non-civilian purposes, such as military advancements or authoritarian surveillance systems. By controlling access to high-performance chips, the U.S. aims to mitigate risks associated with the misuse of AI technologies, particularly by regimes that could use them for internal control or international destabilization. The restrictions could have significant commercial ramifications for companies like Nvidia and AMD. Both firms have seen rapid growth in AI-driven markets, with Nvidia's A100 and H100 GPUs integral to many AI applications, ranging from autonomous vehicles to advanced robotics. Restrictions on international market access, particularly to regions with growing tech ambitions like the Middle East, could hinder their sales and innovation strategies. At the same time, this move would have broader implications for the global tech landscape. Countries in the Middle East may be forced to seek alternative suppliers or invest in developing their semiconductor industries. As U.S.-made AI GPUs become more challenging to obtain, nations may turn to competitors like China or explore domestic production, further diversifying the global semiconductor market. The full details and scope of the proposed restrictions are still under consideration. However, as AI becomes more integral to military, economic, and political power, controlling access to the technologies that fuel it is becoming a central focus of U.S. foreign policy. How the world responds to these restrictions will likely shape the future of the AI industry and global technological leadership.

US reportedly exploring sales cap on AI chips to Middle East

Meanwhile, ASML shares plunge as China export curbs hit forecast Amid fears that Middle Eastern nations are being used to funnel AI accelerators and other sensitive technologies to China, the Biden administration is reportedly considering capping shipments of the products to certain countries in the region. That's according to a Bloomberg report citing unnamed sources familiar with the matter, who told the publication that the idea has gained traction among officials in recent weeks. Government agencies haven't formalized a plan - they're just reportedly discussing it. The Register asked the Commerce Department for comment, and we'll let you know if we hear anything back. Exports of accelerators are already restricted - and have been since 2023 - on grounds that firms in Middle Eastern nations may be reselling certain kit to Chinese entities, circumventing trade restrictions. Sales to Middle Eastern nations are not banned outright, but require the suppliers of AI hardware to obtain special licenses. Nvidia, for instance, recently reached an agreement to furnish the Qatari telecom Ooredoo with thousands of GPUs. Saudi oil giant Aramco announced it was also building an AI supercomputer powered by Nvidia GPUs. However, the Biden administration could make it much harder to obtain these licenses by capping the number granted to certain countries. This could spell trouble for Saudi Arabia and the United Arab Emirates (UAE), which have sought to establish themselves as hotbeds for AI development and rely heavily on American-made chips to fuel their ambitions. Caught between Biden and Beijing, some entities - like the UAE - have been forced to cut ties with their Chinese partners simply to avoid scrutiny. Earlier this year UAE-based AI developer G42 said it would end its relationship with Chinese manufacturing giant Huawei in hopes of assuaging concerns raised by US intelligence agencies that it might be secretly funnelling AI advanced technologies and genetic data to the Middle Kingdom. While imports of American accelerators to Middle Eastern countries remain limited, access to compute isn't nearly as difficult. In fact, G42 is currently in the process of funding some $900 million worth of wafer-scale supercomputers from AI chipmaker Cerebras to remotely train and run various AI models via the chip startup's cloud. Meanwhile, Microsoft is investing $1.5 billion into G42 to accelerate the development of AI technologies in its own cloud - a deal that very quickly drew the scrutiny of US officials. And it's not just Cerebras or Microsoft taking advantage of the dubious geopolitical climate to grow business. In September, US chip designer turned inference-as-a-service provider Groq announced a strategic partnership with Aramco to build an AI datacenter. We'll note that, in this case, Groq's LPU - which is built on GlobalFoundries' 14nm process - likely falls outside of US trade restrictions. Speaking of another highly restricted technology, ASML, which produces some of the most sophisticated photolithography tools used in the manufacture of high-tech semiconductors, saw its share price plunge on Tuesday in response to a lackluster forecast. At market close, the semiconductor equipment manufacturer's share price was down 16.26 percent. Among the causes for the dive was the revelation [PDF] that US efforts to stem the flow of advanced technologies like ASML's lithography tech have had their desired effect - and seen Chinese buyers exit the market. The semiconductor equipment maker now expects China to account for just 20 percent of its annual revenue in 2025, down from roughly 49 percent in prior years. Over the past few years, the US has levied intense pressure on its allies, including The Netherlands, to restrict the sale of ASML's most sophisticated chipmaking equipment to China. The rules were initially limited to extreme ultraviolet lithography (EUV) kits, but later extended to older deep ultraviolet litho machines (DUV). The US has also been successful in pressuring ASML to stop servicing many of its Chinese customers. Between export restrictions and the service ban, it shouldn't come as a surprise that ASML sales in the region would evaporate. The fact that ASML enjoyed something of a sales bonanza as Chinese chipmakers stocked up on its equipment before the restrictions went into effect probably doesn't make for a flattering comparison nearly a year later. ASML also blamed a "significant reduction in Low NA EUV tools" - those with a small numerical aperture and therefore lower resolution - for its revised sales forecast. "While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness," ASML CEO Christophe Fouquet warned in a prepared statement. The Dutch tech giant expects to see 2025 net sales in the range of €30 billion to €35 billion ($32-38 billion). ®

White House considers expanding Nvidia and AMD's AI chip export limits to additional countries

The Biden administration has privately discussed capping sales of advanced AI chips from Nvidia and AMD to certain Persian Gulf countries in the interest of national security, Bloomberg reported on Monday. The restriction could put a ceiling on export licenses for certain countries, potentially Saudi Arabia and the United Arab Emirates, which are heavily investing in AI data centers. The White House increasingly views American AI chips as a key advantage on the global stage. Last year, the United States banned the sale of Nvidia and AMD's advanced AI chips to China, and placed export restrictions on 40 other countries around the globe to close loopholes where AI chips could indirectly get to China. The latest reported discussions could indicate that U.S. officials are worried about the Persian Gulf's global influence over the AI industry. This year, Saudi Arabia reportedly planned to launch a $40 billion fund to invest in AI technology, while OpenAI reportedly held discussions with a UAE-backed investment fund over participating in its latest $6.6 billion funding round.

News of a Possible AI Chip Cap, ASML Sales Warning Hit Nvidia and Other Semi Stocks

Also weighing on the sector was a warning from chipmaker equipment company ASML Holding about non-AI demand. Nvidia (NVDA) shares fell from yesterday's all-time closing high, and shares of other chipmakers declined, following indications the Biden administration is considering limiting the export of artificial intelligence chips to some countries in the Middle East. Bloomberg reported that White House officials have discussed putting a cap on export licenses to certain nations because of national security concerns. The focus was on Persian Gulf countries that have a growing interest in AI and the funding to purchase those technologies, the report said, adding that the discussions are in the early stages. Also weighing on semiconductor stocks was a warning from chipmaker equipment ASML Holding (ASML), which released its third quarter earnings a day earlier than expected. "While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover," said CEO Christophe Fouquet. "It now appears the recovery is more gradual than previously expected." ASML predicted 2025 sales of EUR30 billion to EUR35 billion ($32.7 billion to $38.1 billion), which is in the lower half of the range of its previous guidance. New York-traded shares of ASML sank some 16%, pulling them into the red for the year. The PHLX index of semiconductor stocks fell more than 4%. Nvidia's shares were down nearly 5%, though they remain up more than 160% in 2024.

Chip stocks fall on ASML forecast cut, potential US AI chip export cap

Oct 15 (Reuters) - U.S. semiconductor stocks fell on Tuesday after chip equipment maker ASML (ASML.AS), opens new tab cut its annual sales forecast and a report said the Biden administration was considering capping sales of advanced artificial intelligence processors to some countries. AI chip giant Nvidia (NVDA.O), opens new tab fell 4.4%, retreating from a record high hit in the previous session that had put it on the brink of dethroning Apple as the world's most valuable company. Advertisement · Scroll to continue Tuesday's drop was set to reduce the AI chip major's market capitalization by about $138 billion to $3.25 trillion, widening the gap with Apple's value of $3.58 trillion. Other chip firms, including AMD (AMD.O), opens new tab, Intel (INTC.O), opens new tab, Arm , Broadcom (AVGO.O), opens new tab and Micron (MU.O), opens new tab, fell between 2.3% and 6.2%, which dragged the Philadelphia SE Semiconductor Index down nearly 4% and weighed on the Nasdaq index (.IXIC), opens new tab. Advertisement · Scroll to continue U.S.-listed shares of ASML were down 12% after the Dutch company published results ahead of schedule in an apparent error, reporting weak bookings, lowering forecast, and indicating slower chip demand recovery outside AI sector. "ASML's fat finger error isn't cause for concern in itself, but the content of the release didn't make comforting reading for investors," said Derren Nathan, head of equity research, Hargreaves Lansdown. Separately, Bloomberg News reported on Monday that U.S. officials have been considering implementing a cap on export licenses for AI chips to specific countries - mostly in the Persian Gulf region, citing national security concerns. Washington is increasingly concerned that the Middle East might serve as a channel for China to acquire advanced American chips that are prohibited from being directly shipped to the Asian country. "With the AI revolution expected to play such a huge part in upping productivity and enabling other technological advances it's not surprising the U.S. wants to do what it can to maintain its dominance," said Danni Hewson, head of financial analysis at AJ Bell. Reporting by Akash Sriram and Jaspreet Singh in Bengaluru: Editing by Tasim Zahid Our Standards: The Thomson Reuters Trust Principles., opens new tab

Chip stocks fall on ASML forecast cut, potential US AI chip export cap

(Reuters) - U.S. semiconductor stocks fell on Tuesday after chip equipment maker ASML cut its annual sales forecast and a report said the Biden administration was considering capping sales of advanced artificial intelligence processors to some countries. AI chip giant Nvidia fell 4.4%, retreating from a record high hit in the previous session that had put it on the brink of dethroning Apple as the world's most valuable company. Tuesday's drop was set to reduce the AI chip major's market capitalization by about $138 billion to $3.25 trillion, widening the gap with Apple's value of $3.58 trillion. Other chip firms, including AMD, Intel, Arm, Broadcom and Micron, fell between 2.3% and 6.2%, which dragged the Philadelphia SE Semiconductor Index down nearly 4% and weighed on the Nasdaq index. U.S.-listed shares of ASML were down 12% after the Dutch company published results ahead of schedule in an apparent error, reporting weak bookings, lowering forecast, and indicating slower chip demand recovery outside AI sector. "ASML's fat finger error isn't cause for concern in itself, but the content of the release didn't make comforting reading for investors," said Derren Nathan, head of equity research, Hargreaves Lansdown. Separately, Bloomberg News reported on Monday that U.S. officials have been considering implementing a cap on export licenses for AI chips to specific countries - mostly in the Persian Gulf region, citing national security concerns. Washington is increasingly concerned that the Middle East might serve as a channel for China to acquire advanced American chips that are prohibited from being directly shipped to the Asian country. "With the AI revolution expected to play such a huge part in upping productivity and enabling other technological advances it's not surprising the U.S. wants to do what it can to maintain its dominance," said Danni Hewson, head of financial analysis at AJ Bell. (Reporting by Akash Sriram and Jaspreet Singh in Bengaluru: Editing by Tasim Zahid)

US Weighs Capping Nvidia, AMD AI Semiconductor Sales to Some Countries

Bloomberg has learned that officials in the Biden administration have discussed capping sales of advanced AI chips from Nvidia Corp. and other American companies on a country-specific basis. Annabelle Droulers reports on Bloomberg Television. (Source: Bloomberg)

Why Nvidia, AMD And Other Chipmakers Are Moving Lower In Tuesday's Premarket - NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), Micron Technology (NASDAQ:MU), ARM Holdings (NASDAQ:ARM)

Nvidia Corp. NVDA is leading the weakness in the chip space in premarket trading on Tuesday, with potential ramifications of the U.S.-China standoff triggering the slide. The Biden administration has discussed curbing sales of advanced AI chips from Nvidia Corp. NVDA and other U.S. chipmakers on a country-specific basis, Bloomberg reported, citing people familiar with the matter. Such an export curb is already in place in China and a few other countries. The report said, the U.S. is considering a ceiling on export licenses for countries in the interest of national security, with a particular focus on Persian Gulf nations, which have been building AI infrastructure rampantly using their deep pockets in a bid to assert their computational sovereignty. In May when rumors were adrift about a potential pact between the U.S. and Saudi Arabia that would offer the latter security guarantees and lay out a possible pathway to diplomatic ties with Israel, Lumida Wealth's Ram Ahluwalia said, "Semiconductors are the New Oil." "Remember, Saudi is building 60 data centers and diverting investment from 'The Linear City," he said then. According to Benzinga Pro data: Nvidia was down 0.57% to $137.28. Advanced Micro Devices, Inc. AMD slipped 1.03% to $163.56. Micron Technology, Inc. (MU) moved down 0.61% to $107.68. Arm Holdings plc ARM slipped 1% to $160.20. ASML Holding N.V. ASML declined 1.30% to $860.84. See Also: Best Semiconductor Stocks Image via Shutterstock Market News and Data brought to you by Benzinga APIs

Dow and Nasdaq slump as ASML leads a chip stock rout

The Dow and other major indexes experienced losses Tuesday afternoon as chipmakers struggled amid news of potential export caps. In the afternoon, the Dow Jones Industrial Average dropped 118 points, or 0.28%, to 42,939. The tech-heavy Nasdaq and S&P 500 shed 0.8% and 0.4%, respectively. Shares of Dutch semiconductor equipment manufacturer ASML (ASML) plummeted following the company's disappointing third-quarter bookings and a downward revision of its 2025 guidance. During afternoon trading, ASML's stock dropped by more than 16%, reflecting investors' concerns about the company's outlook. "While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover," CEO Christophe Fouquet said in the company's earnings report. "It now appears the recovery is more gradual than previously expected." ASML is the only company in the world that makes the equipment needed for advanced chip manufacturing, and nearly half of ASML's revenue for the second quarter came from sales to China. However, due to export restrictions from the U.S. and the Netherlands, the company is now facing a more challenging business outlook in China. Shares of Nvidia (NVDA) fell over 5% Tuesday, a day after after closing at a record high. The chipmaker's stock was down less than 1% in pre-market trading, but had fallen by about 5% by midday. The drop occurred following a report that the U.S. could cap sales of advanced artificial intelligence chips from U.S.-based chipmakers to certain countries. Biden administration officials in recent weeks have discussed putting a ceiling on export licenses for advanced AI chips, including those from Nvidia and rival AMD (AMD), to countries in the Middle East, citing national security concerns, Bloomberg reported.