Anthropic says Nvidia GPUs getting smuggled into China in prosthetics, Nvidia calls it utter rubbish
Anthropic and Nvidia are at war, a war of words, over the merits - and demerits - of the upcoming US export restrictions on advanced semiconductors, primarily GPUs, to China. While Nvidia has expressed sharp disagreement, Anthropic has argued that the time to safeguard US dominance in artificial intelligence by strengthening export controls - most importantly on China - is now. The spat comes just weeks before the Joe Biden-era 'AI Diffusion Rule' comes into effect on May 15, 2025.advertisementThe controversy began after Anthropic published a lengthy blog alleging that Chinese actors have been smuggling Nvidia GPUs using bizarre methods such as 'prosthetic baby bumps' and shipments 'packed alongside live lobsters.' A GPU, which is short for graphics processing unit, is the backbone for developing AI. The thumb rule is that more advanced GPUs, the type that Nvidia which is an American company, specialises in building, can make better AI. Though, with Chinese startups like DeepSeek being able to make competitive AI with limited GPU resources, the jury is still out on whether this is always the case - and if companies like OpenAI and Google DeepMind have been overspending.Regardless, Anthropic, which is an AI startup backed by Jeff Bezos' Amazon, is urging the US government to tighten controls, especially on a few countries – particularly China - to prevent leakage of high-powered compute resources so America has the upper hand in building the latest and greatest AI. Nvidia has shot back suggesting these claims are utterly rubbish.advertisement
'American firms should focus on innovation and rise to the challenge, rather than tell tall tales,' a spokesperson from Nvidia was quoted as saying by CNBC, adding the AI Diffusion Rule should not be used to stifle competition. (Nvidia believes China already has significant AI expertise.)So, what is this AI Diffusion Rule? It is basically a system where the US has divided different countries into tiers and, based on which group they fall into, these countries will have different levels of access to AI chips made in the US. Tier 1 has 17 US allies, like Japan and Taiwan. They will get unrestricted access to AI chips from the US. In tier 2, there are 120 countries. They will face strict caps which means that companies like Nvidia can sell chips to them with certain conditions in place. Countries deemed adversaries 3 are barred from getting the technology altogether. The list includes China, Russia, Iran, and North Korea.According to Anthropic, this is not enough - and that the US should not delay the proposed timeline of May 15 to enforce it - warning that compute access is the key chokepoint in global AI development and tighter restrictions are needed for both US security and ensure its economic leadership remains intact. It has proposed that the US government should lower chip export thresholds, increase enforcement budgets, and narrow access for tier 2 nations to stop alleged smuggling of GPUs.advertisementNvidia, whose H20 AI chips are under scrutiny, is already feeling the heat. The chipmaker has warned that it could lose up to $5.5 billion in revenue in FY26 due to these new licensing terms coming from loss of business from China.With former President Donald Trump reportedly planning his own updates to the AI Diffusion Rule, the road ahead seems a bit uncertain. It remains to be seen if the rules do come into effect this month and, if yes, what are the far-fetching consequences of some of these changes.Tune In
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Indian Express
26 minutes ago
- Indian Express
Tariff Tracker, June 14: US-China talks restore May 12 status, World Bank forecasts slowdown
Dear reader, Washington will host a massive military parade commemorating 250 years of the US Army on Saturday (June 14), which also happens to be US President Donald Trump's 79th birthday. The event is estimated to cost between $25 million and $45 million, and feature over 6,000 soldiers, 128 army tanks, armoured personnel carriers and artillery, as well as an aerial display featuring 62 aircraft, according to AP reporting. Traditionally, US military parades have been conducted at the end of a war to celebrate victory or to welcome the returning troops. The last military parade took place in 1991 at the end of the Gulf War, and was a less contentious event than Saturday's festivities. The timing is significant as well. Over the last week, the Trump administration has initiated a new phase of its sweeping crackdown against illegal immigration. Raids by the Immigration and Customs Enforcement (ICE) in the garment district in Los Angeles resulted in a flurry of arrests, triggering protests by residents. As the standoff escalated, the US President fanned the fire further, deploying the National Guard and Marines in the city. These moves are unprecedented – the last time a US president deployed the National Guard bypassing a state governor's mandate, it was Lyndon B Johnson in 1958 (check year) seeking to protect Civil Rights activists marching from Selma to Montgomery in Alabama. The use of the National Guard, typically a decision exercised by the state, was challenged in court by California Governor Gavin Newsom, and a federal court ruled in his favour on Friday, ordering control of the troops to be restored to Newsom. However, this order was almost immediately stayed following an appeal by the Trump administration. 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Unlike other nations, China did not immediately seek talks with the US president, and instead, announced countermeasures targeting Liquefied Natural Gas, coal, and farm machinery, among other products. Trump's Liberation Day tariff announcements singled out China, and in the days that followed, saw US tariffs on Chinese products reach 145%, while China charged 125% tariffs. China also decided to hit the US (and by extension the rest of the world) where it hurts most, by announcing an elaborate licensing system to restrict rare earths exports, citing a national security risk. We explained why this move is significant in the Tariff Tracker on June 2. The May 12 agreement had extracted an assurance from the Chinese side to resume rare earths exports. 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'The rise in trade barriers, heightened uncertainty and the spike in financial market volatility are set to weigh on private consumption, international trade and investment,' the report said. It also anticipated a decline in investment 'due to record-high uncertainty, the rise in financing costs, and reduced domestic and external demand.' The World Bank also said that if the tariff rates were to be halved, global economic growth could rise by 0.2% over the next two years. Emerging markets and developing economies would continue to outperform developed nations this year too, but the extent of growth would not be sufficient to narrow income gaps with richer countries, boost job creation, and reduce extreme poverty. India is projected to grow by 6.3% over 2025-26, the fastest-growing large economy. In the face of global uncertainty, investments and exports would remain subdued. The number aligns with the IMF's forecast of 6.2% over the coming year in its World Economic Outlook report.
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Business Standard
35 minutes ago
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Chinese tech giants tap India as export base to US, Africa, West Asia
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Hindustan Times
an hour ago
- Hindustan Times
India moves to conserve its rare earths, seeks halt to Japan exports: Report
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