The Department of Commerce has warned entities against the use of Huawei chips developed in violation of US export controls.
On May 13, the US Department of Commerce’s Office of Industrial Security (BIS) warned entities against the use of Huawei chips developed in violation of US export controls and announced that new AI chip trade rules were coming.
In January, the resignation of the Biden administration completed AI spread rules that govern how American AI technology is distributed worldwide. It was intended to take effect on May 15th.
On May 13, the BIS revoked the rules, laying the restrictions on American companies, “weaking” diplomatic relations with trading partners, and said it would issue alternative rules at a later date.
Jeffrey Kessler, Commerce Secretary of Industry and Security, has directed BIS enforcement officials to remove AI proliferation rules, saying the current administration is “writing a bold and comprehensive strategy for American AI technology with trusted foreign countries around the world, protecting technology from the hands of its enemies.”
Huawei and warnings
The US suspects that China-based Huawei’s latest processor was developed using illegally acquired US technology. This includes, but is not limited to, Huawei’s multi-chip AI processing units that lift the 910B and 910D and include the graphics processing unit 910C.
The May 13 guidelines issued for the use of Huawei and other China-related chips are warnings related to existing rules rather than new rules.
The US has set export restrictions on Huawei and AI technology to China over the past two administrations, determining that Huawei is using the Communist Party of China (CCP) forces and other advances, which use technology to develop weapons and autonomous systems.
For years, regulators have been finding workarounds for such as a licensed China-based Chinese intermediary company, and warning CCP military affiliates that they are “transporting and diverting” to obfuscate licensed end users and obtaining lighting off limits.
Exporting and transferring regulated AI technologies requires a license from BIS. Please note that on May 13, we warned against the export of such technologies or the export or transfer of “red flags” to customers. This has resulted in absurdity at headquarters or significantly increased the orders of advanced computing integration circuits after the addition of export regulations in October 2022.
China’s state media reported that Huawei founder Ren Zhengfei told Chinese administration leader Xi Jinping at a closing door meeting that concerns over U.S. export controls for chips have been eased.
The Chinese administration has directed China’s technology sector to reach self-sufficiency when it comes to advanced semiconductor technology, and Ren said Huawei, which unites 2,000 Chinese companies, will help lead Huawei to 70% self-sufficiency by 2028.
AI Race
When it comes to the chips market, the relationship between the US and communist China is complicated.
US export controls on semiconductors have so far targeted access to the most advanced chips in the Chinese market, as it is expected to hinder the CCP military’s advanced AI development to date. When these rules were issued, semiconductor companies focused on selling large models to China, such as some such as NVIDIA, which is developing chips specifically for the Chinese market.
In April, the Trump administration announced new restrictions on Nvidia’s H20 AI chips, the most sophisticated chip currently sold to China. Nvidia has since estimated revenue losses of $5.5 billion. Bytedance and Tencent is one of China-based companies that acquired H20 chips as China made advances in AI.
Nvidia CEO Jensen Huang told reporters during his trip to Washington on April 30 that Huawei has made “great advances” in AI in recent years. “China is right behind us. We are very close.”
He also said that “the world has changed dramatically” since the previous administration’s AI spread rules were released in January, and that updated rules are needed “to accelerate the spread of American AI technology around the world.”
On May 13, the White House announced that President Donald Trump had secured a $600 billion contract in Saudi Arabia during his visit.
American Chips Companies Nvidia, Advanced Micro Devices and Qualcomm have announced a deal with Saudi Arabia’s Humain to build AI infrastructure, and tech giants such as Google and Oracle have pledged to invest $80 billion in cutting-edge technology. Datavolt, a Saudi Arabian company, will invest $20 billion in US AI data centers and energy infrastructure.
Reuters contributed to this report.
