US senator attacks Biden administration for failing to halt sales of advanced chips to China
- John Kennedy, Republican of Louisiana, says Commerce Department has not done enough to keep Nvidia semiconductors, key to AI technologies, from Chinese entities
US President Joe Biden’s administration came under fire on Capitol Hill on Thursday over reports that illicit networks are selling advanced semiconductor chips made by Nvidia to China, evading export controls meant to block such sales.
Citing an investigation by The Wall Street Journal this month that found more than 70 distributors selling restricted Nvidia chips to entities in China, Senator John Kennedy, Republican of Louisiana, confronted Thea Kendler, assistant secretary of commerce for export administration, about the sales.
“You’ll find 70 distributors … which will sell Nvidia’s supposedly restricted chips to China,” Kennedy said in a Senate Banking Committee hearing. “And in fact, some of them will sell to China the entire servers. They cost about [US$] 300,000 apiece, they’ve got eight chips in them. Isn’t that a fact?”
Kennedy also cited research by the Centre for a New American Security (CNAS), a non-partisan Washington think tank, which reported in October that “there are already underground markets for small quantities of smuggled AI chips, according to on-the-ground reports from Shenzhen”.
The exchange, the most heated in the two-hour hearing, underscored the concern that both US political parties have about China’s ability to pull ahead of the US in the most advanced technologies, particularly artificial intelligence innovations, many of which rely on Nvidia semiconductors.
Much of the hearing concerned efforts to address sales of advanced semiconductors and chipmaking equipment by other countries to China as well as networks that channel restricted US products to Chinese markets.
