The Biden administration is in discussions with Nvidia Corp (NVDA.O) about permissible sales of artificial intelligence chips to China but emphasized that it cannot sell its most advanced semiconductors to Chinese firms.
U.S. Commerce Secretary Gina Raimondo, speaking in an interview with Reuters on Monday, said Nvidia "can, will and should sell AI chips to China because most AI chips will be for commercial applications."
"What we cannot allow them to ship is the most sophisticated, highest-processing power AI chips, which would enable China to train their frontier models," she added.
Raimondo said she spoke a week ago to Nvidia CEO Jensen Huang and he was "crystal clear. We don't want to break the rules. Tell us the rules, we'll work with you."
Raimondo sent a warning to chips companies on AI chips at a forum last week in California. She said traditionally Commerce drew a "cutline" and companies like Nvidia would create a new chip "just below" that line.
"That's not productive," Raimondo said. "I am telling you if you redesign a chip around a particular cutline that enables them to do AI, I am going to control it the very next day."
Raimondo said Monday the department was working with Nvidia. "They want to do the right thing. Obviously they want to sell as many chips as possible."
Nvidia declined to comment. Last week, Huang said the company was working closely with the U.S. government to ensure new chips for the Chinese market were compliant with export curbs.
Raimondo separately said it was too soon to tell if the establishment of a commercial issues working group with China in August was working.
In November, China's central bank granted a license to a joint venture set up by MasterCard and China approved Broadcom's (AVGO.O) $69 billion acquisition of cloud-computing firm VMware . She called those "baby steps in the right direction."
Raimondo said she was disappointed Chinese airlines had not started taking Boeing (BA.N) airplane deliveries. Boeing is still waiting to resume deliveries of its 737 MAX to Chinese airlines more than four years after they were halted following two deadly crashes. Boeing declined comment.
Raimondo said U.S. President Joe Biden raised Boeing last month during talks in California with Chinese President Xi Jinping.
"We're going to keep pressing," Raimondo said. "There is no reason they shouldn't make good on that commitment."
Separately, Raimondo again called on Congress to pass legislation to address potential threats to national security from foreign apps like TikTok. Legislation has stalled to give the administration new tools to address security concerns around foreign-owned apps.
"We need the tools," Raimondo said. "I don't think it should be just banning Tiktok - we don't want get into the business of naming companies for so many reasons... Today it's TikTok. Who knows what it is tomorrow?"
TikTok denies it poses national security concerns.
