The move is basically an attempt by US companies to cripply Chinese operations in areas such as image recognition.

But there are signs that the move will backfire on the US.  It affects its A100 and H100 chips designed to speed up machine learning tasks, but it could interfere with completion of developing the H100, the flagship chip Nvidia announced this year.

Asked for comment, the US department of Commerce would not say what new criteria it has laid out for AI chips that can no longer be shipped to China but said it is reviewing its China-related policies and practices “keep advanced technologies out of the wrong hands.

“While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect US national security and foreign policy interests,” a spokesperson told Reuters.

It appears that the rules also apply to AMD which said it had received new license requirements that will stop its MI250 artificial intelligence chips from being exported to China, but it believes its MI100 chips will not be affected.

Nvidia said it had booked $400 million in sales of the affected chips this quarter to China that could be lost if Chinese firms decide to buy alternative Nvidia products. It said it plans to apply for exemptions to the rule but has “no assurances” that US officials will grant them.