- The Bureau of Industry and Security, part of the Department of Commerce, plays a major role in dealing with restrictions on semiconductor exports to China.
- In 2021, Commerce Secretary Gina Raimond described the BIS as a “small but mighty” agency central to federal national security efforts.
- The agency’s decision could have a material impact on NVIDIA’s business.
Commerce Secretary Gina Raimond testifies before the Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies at the Capitol in Washington, DC, USA, February 1, 2022.
Andrew Harnick | Reuters
A small division within the sprawling Department of Commerce is playing a big role amid headlines about a possible U.S. curb on semiconductor exports to China.
In 2021, Commerce Secretary Gina Raimond described the Bureau of Industry and Security as a “small but mighty” agency central to federal national security efforts. That’s especially true now that President Biden is considering tightening controls on exports of powerful artificial intelligence computing chips to the world’s second-largest economy.
BIS implements the US export control system and is responsible for keeping critical high-tech and defense products out of the wrong hands of companies and governments. The decisions BIS makes about who can and cannot access U.S. technology can have a significant impact on a company’s bottom line.
Chip makers are already taking a hit as a result of the restrictions imposed by the BIS. In 2022, BIS warned NVIDIA that new licensing requirements would prevent it from exporting its advanced A100 and H100 chips to China without obtaining a license from the Department of Commerce, but this was due to China’s It’s part of a broader effort by the Biden administration to curb technological progress.
In August 2022, Nvidia warned that it would lose about $400 million in potential China sales unless customers purchased “alternative products.” Just a few months later, Nvidia began offering a watered-down version of its flagship AI chip for the Chinese market. That lower specification, called A800, was exempt from Commerce licensing requirements.
But the Wall Street Journal reported Wednesday that exports of even weaker Nvidia products could be restricted at the direction of President Biden. The BIS declined to comment on possible tightening of export controls. Nvidia stock surged 180% this year, largely on AI hype, but fell 2% after the WSJ article.
Through the Commercial Control List, BIS can define which product specifications require a license for international sale. The criteria are so specific that only a few commercial products may apply.
The control list is not intended to identify any specific vendor, but few companies are developing high-octane processors that power AI models. Nvidia and AMD lead that group.
Those companies would be held accountable for keeping their high-tech processors out of the Chinese market if export restrictions were implemented.
In one high-profile law enforcement case, BIS targeted hard drive maker Seagate over its decision to continue supplying Huawei after the company was blacklisted in 2020. made it Seagate was fined $300 million by the government. But Seagate had a $1.1 billion business in China, so the financial impact was far greater.
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