Nvidia, Anthropic clash over US' export restrictions on semiconductors

Nvidia and Anthropic are divided on the artificial intelligence policy with US chip export restrictions set to take effect on May 15

Tech major Nvidia hit out against Amazon-backed artificial intelligence startup Anthropic on Thursday in a rare public dispute in relation to US chip export policy, with regulations on AI chips scheduled to take effect soon.

 

“American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters,'" an Nvidia spokesperson told CNBC.

 

Anthropic released a blog post on Wednesday stating that the company “strongly supports” the US Department of Commerce’s ‘Framework for Artificial Intelligence Diffusion’. It advocated for stricter controls and enforcement in a Wednesday blog post, claiming Chinese smugglers concealed chips in “prosthetic baby bumps” and “packed alongside live lobsters”. 

 

Nvidia, the world’s leading maker of graphics processing units (GPUs), argued that restricting chip sales to China and other countries threatens US technology leadership.  The company is facing obstacles in the US, including tariffs and a pending Biden-era regulation on the export of chips that would negatively impact Nvidia’s international sales. Nvidia recently indicated that the new licensing requirements affecting its H20 AI chips for the Chinese market could result in a $5.5 billion revenue loss during the first quarter of its financial year 2025-26 (FY26).

 

What is the AI diffusion export rule?

The regulation seeks to divide up access to the most advanced AI chips and control certain model weights in order to keep the most sophisticated computing power in the United States and among its allies, and away from China. ‘The Framework for Artificial Intelligence Diffusion’ was issued by the US Department of Commerce in January, a week before the end of the administration of former President Joe Biden. Companies must comply with its restrictions starting May 15.

 

Currently, the rule has the world divided into three tiers. Seventeen countries and Taiwan in the first tier can receive unlimited chips. Some 120 other countries are in the second tier, which leaves them subject to caps on how many AI chips they can get. And countries of concern like China, Russia, Iran and North Korea in the third tier are blocked from the chips.

 

Trump eyes changes to AI chip export rule

President Donald Trump is reportedly developing revisions to these restrictions, adding further uncertainty to the already controversial policy. Trump administration officials are weighing discarding the tiered approach to access in the rule and replacing it with a global licensing regime with government-to-government agreements. Such a structure would likely tie into Trump’s broader trade strategy of making deals with individual countries, according to a report by Reuters.