The US Department of Commerce is reportedly considering restricting exports of its own AI models, potentially the latest step to protect artificial intelligence systems from China.
Yahoo Finance's Seana Smith and Madison Mills discuss what this news means for U.S. chipmakers' future economic relationship with China.
For more expert insights and the latest market trends, click here to watch the full episode of Catalyst.
This post was written by Melanie Leal
video transcript
Focusing on the chip sector here this morning, the US Department of Commerce is considering restricting the export of proprietary or closed-source AI models, according to a Reuters report, which could protect AI intelligence systems from China. It is only the latest regulation aimed at Well, just in March, his government stopped shipping Nvidia's more advanced AI chips to the country. And why we bring this up is exactly what this means for so many chipmakers here in the United States. Please tell us about this report. And this is how it ultimately impacts our names, but the two names we're talking about here this morning are Qualcomm and Intel, but Intel comes out and this band is in the second quarter. I said it would impact the bottom line. Well, I'll say it again. , what that pressure ultimately looks like over the next few quarters is something investors are watching and really evaluating as people start making strategic moves in their portfolios here. It's something we need to start recognizing. And, as you mentioned, it's a great point that Intel reversed some of its second quarter guidance here. And my friend on the show, Steve, was telling me this morning that that's part of what's leading to the downward movement. This is what we see on the other side of the screen in the broader industry. But what's interesting here is that the business that Intel and Qual had with China was already very limited. So I wonder how much of this is due to Intel. I'm saying it's a great excuse to explain to investors why there's such bad news here when we're already going through a really tough time. I am interested in how we, policy makers, should specifically engage with China. The election is approaching. With this expansion of AI, will we see a particularly hawkish trend in their activities? Will we hear more and more calls for these restrictions? Yes. You would think so. You can argue with both the Biden administration and a potential Trump president that they have taken a tough stance on China. One could argue that he probably would if Trump were re-elected and returned to the White House in November. It will be even tougher against China. That's the feeling we've been getting from strategists, from economists to industry experts, in recent months. And we must also discuss what exactly this means for China and the potential backlash from China. And ultimately, what some of these retaliatory actions might look like in the future, and when we talk about future retaliatory actions, what kind of companies will be hit the hardest? We will also discuss whether you will receive the same. Exposure to China. They are closely monitoring these developments and escalation in tensions between the two countries. It's something that's on the radar of investors and the industry as a whole. That's a great point. And it became a hot topic when Chinese authorities were talking about the situation surrounding the ban on TikTok. So definitely, we're going to continue to monitor here.
