The Wall Street Journal reported on Tuesday, citing people with knowledge of the situation, that the US is exploring further limitations on the export of AI technology to China.
In extended trade, shares of Advanced Micro Devices (AMD) plummeted roughly 1.5%, while those of Nvidia fell more than 2% in response to the news.
According to the article, the Commerce Department would cease sending chips made by Nvidia and other chip manufacturers to consumers in China as early as July.
Among the American chipmakers caught in the crossfire between China and the Biden administration are Nvidia, Micron, and AMD.
Nvidia claimed in September that US officials had requested the company cease sending two of its top processing processors to China for use in artificial intelligence projects.
Months later, Jensen Huang-led Nvidia announced it will offer a brand-new, cutting-edge processor named the A800 in China in order to comply with export regulations. In order to comply with laws, the business also made early this year adjustments to its flagship H100 chip.
The article added that the additional restrictions the agency is considering would prohibit the sale of even A800 chips without a specific U.S. export license.
The Commerce Department did not immediately respond to a Reuters request for comment.