The Biden-Harris administration announced October 17 that it would be suspending shipments of advanced artificial intelligence chips designed by NVIDIA and other technology companies to China. The administration will also be expanding technology licensing requirements to more countries.

According to Reuters, the regulations restrict more advanced chips and chipmaking tools from being exported to other countries besides China, like Russia and Iran.

Under the new measures, the licensing requirements for exporting advanced chips have been expanded to 40 additional countries. U.S. officials said these countries present risks of diversion to China.

NVIDIA expects its A800 and H800 chips will be impacted by the new rules. While most consumer chips found in laptops, smartphones and gaming devices will be exempt from these laws, some equipment will be subjected to licensing and notification requirements by U.S. officials.

These new regulations will likely be updated every year, explained Gina Raimondo, the Secretary for the U.S. Department of Commerce.

Raimondo said that the goal of the laws is to cut down on China’s access to "advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to (Chinese) military applications." However, Raimondo made it clear that the U.S. does not want to hurt Beijing economically.

“Technology corporations find themselves in the midst of dueling races: to realize the power of GenAI, while navigating the hurdles of escalating tensions between the U.S. and China," said Richard Graham, the director and industry practice lead for Moody's Analytics. "With the Commerce Department's forthcoming restrictions on AI chip exports, companies, particularly those trading globally, must monitor the evolving landscape and adapt to new rules and changing requirements. Screening against the latest third-party risks is essential for any business wishing to avoid reputational risk and fines.”