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The US has expanded its export restrictions of NVIDIA H100 and A100 AI chips to the Middle East in an effort to curb China’s AI expansion, Nvidia has revealed in a US filing.

While sales to Syria and Iran were already sanctioned by the US, recent talks held by China and the United Arab Emirates on potential AI collaboration spurred thousands of orders for Nvidia’s chips.

Nvidia far surpassed market expectations by $2bn more than Wall Street estimates with the release of its record Q2 results on 23 August and is currently one of the world’s most valuable companies, valued at $1.2trn.

As AI requires specialised chips with huge computational power, a shortage caused by increasingly high demand has seen Nvidia corner this market niche. Analysts estimate demand for Nvidia’s AI chips exceeds supply by at least 50%.

On 24 August, Nvidia’s chief financial officer, Colette Kress, warned that US restrictions on the export of AI chips to China will hurt the chip maker and other US companies. 

According to research from GlobalData, China consumes around 40% of semiconductors manufactured globally but is only 12% self-sufficient.

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The restrictions are thought to be a redoubled effort by the US to curb China’s access to AI resources by restricting Middle Eastern links to Beijing.

In a statement on the filing, Nvidia said the restriction: “doesn’t affect a meaningful portion of our revenue.”

AI deals in the US far outnumber those in the UAE, but fears that the UAE serves as a transhipment point to China and Russia have prompted the Biden Administration to halt Beijing’s AI ambitions.

The US had the most AI venture finance deals so far in 2023, according to GlobalData's deals database.

Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.