US Gov Blocks $5 Billion In Crucial AI Chips Ordered By Top Chinese Tech Giants

President Joe Biden’s Commerce Department has blocked American chipmaker Nvidia from sending billions of dollars worth of key artificial intelligence (AI) chips ordered by top Chinese tech giants, the Wall Street Journal reported on Tuesday.

Nvidia was set to deliver over $5 billion in chips from Chinese orders, but the Biden administration is blocking them due to new chip restrictions, according to the WSJ. Nvidia was working on sending the chips before the restrictions took effect but the company received a letter notifying it that the sanctions would take effect immediately instead of one month after their announcement on Oct. 17, as originally scheduled, individuals with knowledge of the situation told the WSJ.

The orders were for 2024 and were from companies including TikTok’s Chinese parent company ByteDance and Chinese tech giants Alibaba and Baidu, according to the WSJ.

Companies need to get approval from the Commerce Department before sending certain chips to China due to the new sanctions, according to the WSJ. The export controls close loopholes in current restrictions and reduce the export of equipment necessary to make advanced semiconductor chips, according to the rules announced by the Department of Commerce on Oct. 17.

Nvidia ceased accepting new Chinese orders for advanced AI chips in response to the recent limitations, one of the individuals with knowledge of the situation told the WSJ.

“These new export controls will not have a meaningful impact in the near term,” a Nvidia spokesperson told the WSJ.

Nvidia, ByteDance, Alibaba, Baidu and the Commerce Department did not immediately respond to the Daily Caller News Foundation’s request for comment.