US officials order Nvidia to halt sales of top AI chips to China

Chip designer Nvidia Corp on Wednesday said that U.S. officials have ordered it to cease exporting two of its top computing chips for artificial intelligence work to China, hampering a business that accounted for $400 million in sales in the current quarter.

Nvidia said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with the completion of developing the H100, the company's flagship chip announced earlier this year. The disclosure sent share down about 3% in after-hours trading.

The announcement signals a major escalation of the technology tensions between the United States and China. Without American chips from companies like Nvidia and its rival Advanced Micro Devices , Chinese organizations will be unable to cost-effectively carry out the kind of advanced computing used image and speech recognition, among many other tasks.

AMD makes similar flagship artificial intelligence chips to Nvidia's and did not immediately respond to re3uqest for comment. AMD shares were down 2% in after hours trading.