U.S. officials have slowed licensing to chipmakers such as Nvidia Corp., according to people familiar with the matter. and Advanced Micro Devices Inc., to supply large-scale artificial intelligence accelerators to the Middle East, according to people familiar with the matter, as officials review artificial intelligence for national security development in the region.
It is unclear how long the review will take, nor is there a specific definition of what constitutes a enormous shipment, said the people, who asked not to be identified because the conversations are private. Officials say they are particularly focused on large-scale sales as countries such as the United Arab Emirates and Saudi Arabia look to import huge volumes of chips used in AI data centers.
AI accelerators, a category pioneered by Nvidia, facilitate data centers process the flood of information needed to develop chatbots and other AI-based tools. They have become necessary equipment for companies and governments looking to build artificial intelligence infrastructure.
In October, the Commerce Department added much of the Middle East to chip export restrictions that originally focused on China and a few other foreign adversaries. This meant companies needed a special license from the U.S. government to ship cutting-edge semiconductors and chip-making tools to countries like Saudi Arabia and the United Arab Emirates.
Some people said U.S. officials have delayed or failed to respond to license applications submitted under this provision over the past few weeks. This includes trying to sell to customers in the United Arab Emirates, Saudi Arabia and Qatar, according to one of the people. In addition to Nvidia and AMD, Intel Corp. and start-up Cerebras Systems Inc. also produce accelerator chips. Four companies declined to comment.
The goal, citizens say, is to give Washington time to develop a comprehensive strategy on how to deploy advanced chips abroad. Some people say this includes negotiations over who manages and secures the facilities used to train AI models.
Nvidia shares fell to a low a day after Bloomberg’s report on the licensing reviews. At the close in Up-to-date York, the stock fell 3.8% to $1,105. Meanwhile, AMD made up for earlier gains. It rose less than 1% to $166.75.
In a statement, the Commerce Department said its top priority was “protecting national security.”
“When it comes to cutting-edge technologies, we are conducting extensive due diligence as part of the interagency process, carefully reviewing license applications submitted by applicants who intend to deliver these advanced technologies globally,” a department official said. “As always, we remain committed to working with our partners in the Middle East and around the world to protect our technology ecosystem.”
Thea Kendler, who heads the Commerce Department’s export administration, visited the United Arab Emirates, Saudi Arabia, Qatar and Kuwait earlier this month as part of the ongoing discussions. The United Arab Emirates indicated there was progress in cooperation on semiconductor export controls, another person familiar with the matter said.
Part of the concern is that Chinese companies, which are themselves largely cut off from cutting-edge American technology, could gain access to these chips through data centers in the Middle East. The Biden administration is waging a broader campaign to keep advanced semiconductors and manufacturing equipment out of China’s reach for fear the technology will be used to strengthen its military.
The United Arab Emirates and Saudi Arabia are vying for regional leadership in artificial intelligence as they seek to reduce their economies’ dependence on oil. Both countries see the United States as a key partner in the effort, and top officials and companies have said they will comply with U.S. requests to separate Chinese supply chains or divest completely from Chinese technology.
Meanwhile, Saudi Arabia has just signed an agreement with the Chinese company Lenovo Group Ltd., which assumes that the computer manufacturer will build a research and development center in Riyad.
The ability to secure export licenses is a major part of Microsoft Corp.’s investment negotiations. into $1.5 billion artificial intelligence company G42. The partnership came after months of talks with U.S. officials.
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