The US is considering new regulations on the export of AI chips to China, according to a report

According to persons familiar with the situation, the United States is proposing further limits on the sale of artificial intelligence (AI) chips to China.

Nvidia shares sank more than 2% in extended trade, while Advanced Micro Devices (AMD) dipped roughly 1.5 percent.

According to the source, the Commerce Department would halt shipments of Nvidia and other semiconductor firms to Chinese clients as early as July.

Nvidia, Micron, and AMD are among the American chipmakers stuck between China and the Biden administration.

Nvidia announced in September that US officials had urged the firm to halt selling two of its top processing processors for artificial intelligence development to China.

Months later, Jensen Huang's Nvidia said that it will provide a new sophisticated processor called the A800 in China to comply with export control regulations. To comply with requirements, the business also changed its flagship H100 microprocessor earlier this year.

However, the new restrictions being considered by the department would prohibit the selling of even A800 chips without a special U.S. export licence, according to the article.

The Commerce Department did not immediately reply to a request for comment from Reuters.