The US-based AI firm Anthropic has criticized NVIDIA's stance on the AI Diffusion rule, claiming that Team Green's shipments to China should be "reviewed carefully".
Anthropic Says NVIDIA's Opposition To the AI Diffusion Rule Comes From Their Business In China, Which Involves "AI Chip" Smuggling
There have been many debates around the US AI Diffusion rule since the Biden administration initially announced the policy. NVIDIA showed the most resentment towards it, mainly due to its attachment to the Chinese markets. Interestingly, the famous AI firm Anthropic seems highly against a policy revision of the AI Diffusion rule, implying that the ultimate benefit of switching up the terms will favour China in the AI race. They also made some comments about NVIDIA's business with China as well, and to our surprise, Team Green was quick enough to respond.
China has established sophisticated smuggling operations, with documented cases involving hundreds of millions of dollars worth of chips. In some cases, smugglers have employed creative methods to circumvent export controls, including hiding processors in prosthetic baby bumps and packing GPUs alongside live lobsters.
Chinese firms continue to establish shell companies in third countries at a rapid pace to evade export controls.
- Anthropic
We have reported on GPU smuggling incidents in China several times now, involving unique incidents that were mostly associated with consumer PC hardware products, but in terms of AI chips alone, Anthropic has made some interesting claims. They believe that individuals are smuggling NVIDIA's high-end chips to China by packing GPUs alongside live lobsters, although we are not sure how that would work out. But yeah, given how the US has managed to control chip supply to China by regulating exports, the nation does seem to take desperate measures.
The comments from Anthropic clearly depict that the firm is in favor of a "tiered system." In fact, they want the US administration to further tighten its control over chip supply by lowering the chip threshold that can be exported to nations. After Anthropic's statement, NVIDIA was quick enough to respond, claiming that AI firms should focus on building American businesses rather than telling tales to the public.
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.
- NVIDIA via CNBC
We didn't see American firms battling over a policy coming our way, but it seems like the evolving geopolitical situation has them frustrated. For now, the AI Diffusion policy is set to be implemented by May 15, and it is likely that we will see an announcement on this rule soon.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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