Several countries have acquired artificial intelligence (AI) chips from US technology companies, including Nvidia and AMD. These countries include China and Saudi Arabia.

However, in the future, such transactions will not be as easy as before. The US government has imposed export restrictions on AI chips made by Nvidia and AMD to China, and now these rules are also starting to affect some countries in the Middle East.

When the restrictions were imposed on China, the US government claimed that these actions were taken on the basis of national security. However, the US Department of Commerce, which regulates export licenses, did not provide an explanation for the reasons behind these restrictions on Middle Eastern countries.

Nvidia and AMD have received notifications of these restrictions from the relevant authorities. Although there is a ban, both companies have stated that these restrictions will not affect their revenue.

Nvidia stated, "During the second quarter of fiscal year 2024, the US government informed us of additional licensing requirements for certain products (GPU) A100 and H100 intended for specific customers and other regions, including some countries in the Middle East." Unfortunately, did not specify which Middle Eastern countries are affected by these restrictions.

Previously, it was reported that several countries had acquired AI chips from Nvidia. In mid-August, leading Chinese companies such as Baidu, the parent company of TikTok ByteDance, Tencent, and Alibaba, purchased $5 billion worth of AI chips from Nvidia, equivalent to approximately 76 trillion Indonesian Rupiah. As an initial stage, 100,000 A800 processors from Nvidia worth $1 billion or approximately 15.2 trillion Indonesian Rupiah will be delivered this year. The Financial Times reported that China will use Nvidia's AI chips to build generative artificial intelligence systems.

In addition to China, Saudi Arabia and the United Arab Emirates (UAE) have also reported purchasing thousands of AI chips from Nvidia. Saudi Arabia is reported to have ordered at least 3,000 Nvidia H100 chips, while the UAE has ordered thousands of AI chips from this US company. These chips are likely to be used for AI software development. The UAE has previously developed a large language model named Falcon, and these AI chips may be related to that project.

It is not yet known whether the current export ban on chips will affect existing deals or not.

Export restrictions on chips made by US technology companies have been imposed by US regulators since October 2022, particularly on Chinese companies. This action is taken by the US as an effort to prevent technology they produce from being used for China's military purposes. The US government argues that semiconductor components exported from US companies to China can be assembled there and used for China's military purposes. Therefore, the US government has restricted the export of semiconductors from US companies to China to prevent the technology from being utilized by China's military.

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