Asian Tech Press (Oct 18) -- The U.S. government updated its export control rules for artificial intelligence (AI) chips on Tuesday, with plans to block companies like Nvidia from exporting advanced AI chips to China.

The updates to the rules, which will affect exports of Nvidia's chips, including the A800 and H800, to China, will go into effect after 30 days of public notice.

U.S. Commerce Secretary Gina Raimondo said the new measures are intended to close loopholes, adding that it is likely to update them at least once a year in the future.

Raimondo said the new restrictions will only affect a small fraction of chip exports to China. Chips used in consumer products such as game consoles or smartphones will not be subject to export controls.

The new measures also aim to prevent companies from bypassing chip restrictions through chip stacking technology, according to media reports.

NVvidia responded by saying, "Given the demand worldwide for our products, we don't expect a near-term meaningful impact on our financial results."

It did acknowledge, however, that the new measures on advanced semiconductors could impact product development and cause certain of the company's operations to relocate to other regions.

Notably, the new restrictions will also affect chip sales to China by companies such as AMD and Intel, as well as chip equipment suppliers including Applied Materials, Lam Reasearch and KLA.

In response to the new U.S. export control regulations, Dutch lithography giant ASML said in a statement that it "will need to carefully assess any potential implications."

And a number of Chinese companies said in interviews that they had received the news in advance, and many of them have stocked up in advance. Tencent, Baidu and other large Chinese technology companies also said that they have "sufficient stock".

A spokesperson for China's Ministry of Commerce said Wednesday afternoon in response to the new restrictions, "China is strongly discontent with this and resolutely opposes it."

China urged the U.S. to "expeditiously remove export controls on semiconductors to China and create a fair, just and predictable business environment for enterprises from all countries, including Chinese companies."

The spokesperson added, "China will take all necessary measures to resolutely safeguard its legitimate rights and interests."