Shares of companies in China focused on artificial intelligence (AI) have been declining off media reports which allege that the United States is looking at imposing a new raft of export controls on microchips available for import into China.
Between Tuesday afternoon and mid-day Wednesday the Chinese CSI artificial intelligence index fell over 4%off the news. Shenzen-traded shares of Inspur Electronic Industry fell 10% and Chengdu Information Technology dropped almost 8%.
At the same time, Hong Kong-listed shares of online giant Alibaba, which just released its own version of the popular AI chatbot ChatGPT, dropped 1.6%. Tencent shares, fell 1.58%, due to its focus on building its own AI model.
Citing sources familiar with the matter, the Financial Times and the Wall Street Journal reported that the US government is looking at closing a loophole in the restrictions on the sale of powerful computer chips which are being used to develop artificial intelligence systems in China. It is expected that the new rules will greatly impact sales in the top semiconductor market in the world.
The step is one more move by Washington to limit the technological advance of China, and analysts predict it will heighten tensions between the two superpowers.
It is expected that the new restrictions, which may go into effect as early as July, will also impact major US chip manufacturers, such as Nvidia, which is behind the production of graphics chips which underlie the technologies which power OpenAI’s ChatGPT and Alphabet’s Band chatbots.
The Wall Street Journal reported that the US Commerce Department may, “stop the shipments of chips made by Nvidia and other chip makers to customers in China and other countries of concern without first obtaining a license.”
Nvidia, which pulls in about one fifth of its revenue from China, fell 4.6% in pre-market trading, as shares of rival Advanced Micro Devices fell about 3.7%.
The White House is also preparing an executive order which will focus on screening investment capital heading into China, with an eye to making sure the United States is not helping to technologically advance the Chinese Military.
