AMD shares dip on report of U.S. roadblock to sale of China-specific chip

investing.com:

Investing.com -- Shares in Advanced Micro Devices (NASDAQ:AMD) slipped in premarket U.S. trading on Tuesday after Bloomberg News reported that the U.S. government had placed a hurdle in front of the company's effort to sell an artificial intelligence chip designed for the Chinese market.

Citing unnamed people familiar with the matter, Bloomberg reported that AMD had hoped that the Commerce Department would approve the sale of the processor to customers in China. The sources added that the chip had less capabilities than those AMD offers outside of the U.S. and adhered to U.S. export restrictions, Bloomberg said.

However, the people said that the U.S. officials found the chip was still too powerful. AMD was told to obtain a license from the Commerce Department's Bureau of Industry and Security in order to sell it in China.

AMD and the Commerce Department did not immediately respond to requests for comment, media sources said.

Last year, the Biden administration strengthened a recent drive to curb shipments of cutting-edge AI chips designed by Nvidia (NASDAQ:NVDA) and others to China, citing a need to limit the country's access to sophisticated technology that is critical to its military applications.

A prior measure in 2022 had prevented Nvidia and AMD from selling these processors to China. At the time, AMD said it did not expect to be materially impacted by the move.