Chinese A.I. stocks fall as U.S. reportedly weighs curbs on chip exports

on the country The U.S. is planning to impose more chip restrictions on China, causing China's AI stocks to fall.

Chinese A.I. stocks fall as U.S. reportedly weighs curbs on chip exports

The Nvidia Corp.'s HGX H100 artificial Intelligence supercomputing graphics processor unit (GPU), at the company offices in Taipei on Friday, 2 June 2023.

I-Hwa Cheng / Bloomberg / Getty Images

China's artificial-intelligence stocks dropped Wednesday, after the Wall Street Journal reported the U.S. was planning to impose a new ban on the shipments of AI chip to China.

The Journal reports that U.S. chipmakers such as Nvidia could be affected by this move, which could occur as early as July.

Nvidia is the manufacturer of graphics chips that power OpenAI's ChatGPT chatbot and Alphabet Bard.

On Wednesday, the CSI index in China fell 3% as a result of this news. Inspur Electronic Information Industry shares traded in Shenzhen fell 10%, and Chengdu Information Technology of Chinese Academy of Sciences' shares dropped about 8%. These companies primarily manufacture computers and software.

Other Chinese AI companies also dropped. Alibaba, a Hong Kong-listed company, has launched its own version ChatGPT, a viral chatbot, while Tencent, a company building its AI model, also fell.

The WSJ cited sources that were familiar with the issue to report that the U.S. is growing concerned about China's AI capabilities.

The report states that the U.S. Commerce Department can "stop the shipment of chips by Nvidia or other chip makers to clients in China and other concern countries without first obtaining an license."

CNBC's requests for comments after regular business hours were not immediately responded to by the Commerce Department.

This move would expand Washington's efforts in blocking China from access to advanced chip technology.

In October, the U.S. imposed rules that would prevent China from acquiring advanced chip technology.

Beijing has banned Chinese operators who operate critical infrastructures from purchasing products from Micron Technology. The Chinese government cited the U.S. chip maker as a "major risk" to security.

Washington reportedly also advised South Korea to not allow its own chip makers to fill Micron’s void in China.