Export controls now a key factor in AI chip development – adding risk for the whole industry

Analysis Few of us would have imagined that national security would play such a key role in AI hardware, even dictating its development, but here we are – in a new era of export controls.

Trade restrictions on advanced AI chips are reshaping the entire semiconductor industry in unprecedented ways. Where previously the design and performance of AI accelerators were primarily driven by physics, manufacturing yields, and customer demands, they are now controlled by US export restrictions.

The US's Department of Commerce has set strict limits on how leading American technology companies, such as Nvidia and AMD, design AI chips, with restrictions on performance, memory bandwidth, and interconnect speeds. This has forced technology companies to create specialized, downgraded versions of their flagship AI chips solely to comply with regulations.

... [I]nnovation is sometimes running in reverse as companies intentionally cap capabilities to allow their global sales to grow. The risk ...