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AMD hits US roadblock in selling AI chip tailored for China, Bloomberg News reports

FILE PHOTO: Illustration picture of AMD chip

(Reuters) -Advanced Micro Devices has hit a U.S. government roadblock in its efforts to sell an AI chip tailored for the Chinese market, as Washington cracks down on the export of advanced technologies to Beijing, Bloomberg News reported on Monday.

AMD tried to get the U.S. Commerce Department's go-ahead but officials said it must obtain a license from the Bureau of Industry and Security as the chip was too powerful despite being weaker than what the company sells outside China, and designed to meet U.S. export restrictions, the report said, citing sources familiar with the matter.

AMD and the Commerce Department did not respond to Reuters requests for comment.

Shares of the U.S. company fell more than 3% in premarket trading on Tuesday as investors feared that the reported development could hamper its efforts to catch up with AI front-runner Nvidia, whose semiconductors have captured more than 80% of the market for the advanced chips.

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The U.S. government has moved aggressively in recent months to halt shipments to China of more advanced AI chips, as part of its efforts to stop Beijing from receiving cutting-edge U.S. technologies that could strengthen its military.

It imposed new rules in October barring exports of Nvidia's A800 and H800 chips to China, both of which were made to comply with previous export rules. AMD was also impacted by the move.

The restrictions have sapped Nvidia's China revenues, which include sales to Hong Kong, with the company recording a close to 53% sequential drop in its fiscal fourth quarter. AMD did not provide a figure for its fourth-quarter China revenue.

AMD had warned in a January filing that any further revisions to the curbs may also bring its relatively slower MI200 chips under licensing requirements, possibly barring their export to China.

Nvidia has been offering customers samples of two new AI chips aimed at the China market as it looks to defend its market dominance and navigate the export restrictions.

(Reporting by Arsheeya Bajwa and Angela Christy in Bengaluru; Editing by Dhanya Ann Thoppil, Sherry Jacob-Phillips and Devika Syamnath)