US Government Halts Sales of NVIDIA’s AI GPUs to Middle Eastern Nations

01.09.2023 - 10:53 / wccftech.com / Ai / Ai Gpus

The US government has reportedly halted the sale of NVIDIA's AI GPUs to Middle Eastern nations to prevent indirect technology transfer to China.

The US government has yet again made an attempt to bolster the "uncertainty" in the tech industry. Telegraph cites that this decision by the government will affect the sales of NVIDIA's H100 and A100 GPUs to Middle Eastern countries such as Saudi Arabia and the UAE.

NVIDIA itself disclosed the information via a US filing, claiming that the Biden administration has now made it obligatory to adhere to "additional licensing requirements," which leads to the conclusion that the US doesn't want Team Green to do business in the East.

This development comes after it was disclosed that the UAE and Saudi Arabia are heavily investing in the AI industry, capitalizing on the immense power provided by NVIDIA's H100 GPUs. Both nations have reportedly ordered thousands of H100s, planning to create large-scale LLM models for their AI sector. Analysts have reported this move as "self-defense" by the US since the government fears a technology transfer from Middle Eastern nations to China.

The main question here is why the US fears the immense potential of the Chinese AI industry. The answer is simple: the extent of the "AI boom" in China is much larger than in other nations, and companies like NVIDIA have gained most of their AI sales traction from Chinese companies. The Chinese AI industry is projected to surpass the US in just a few years, giving the country an edge in the US-China technological "warfare".

However, the approach of the US government here isn't sustainable according to the indicators shown by the industry. To back this statement, we should notice that companies like Intel, NVIDIA, and Qualcomm press the US government to ease their trade policies with China since it compromises much of their revenue. Moreover, China isn't worried about sanctions because local companies are diverting their focus on "homegrown" equipment; a prime example is a recent statement portraying the vast potential Huawei AI GPUs hold.

The licensing requirement referenced in our 10Q doesn’t affect a material portion of our revenue, and we are working with the US government to address it.

-NVIDIA spokesperson addressing the new policy

NVIDIA and Intel have placed their bet on the AI "gold mine," with plans on capitalizing billions through it. If the Biden administration continues to adopt "drastic measures," it will significantly impact the tech industry, forcing them to find workarounds that would further worsen the situation.

News Source: Telegraph