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US Blacklists Key Intel and Nvidia Partner in China, Hits Three Other Firms

The US Department of Commerce’s Bureau of Industry and Security (BIS) has added Sitonholy, a leading Chinese provider of chip industry solutions and a partner of Intel and Nvidia, to its Entity List. This effectively bans US companies from doing business with Sitonholy without obtaining a special license from the US government.

Sitonholy provides enterprise solutions and cloud services in China, sells hardware, and offers cloud services, including gaming, based on Intel and Nvidia technologies. US companies that want to do business with Sitonholy must now obtain a license from the BIS. However, all license applications will be presumed to be denied.

The move is a significant blow to Sitonholy, as the Chinese chip industry currently lacks direct domestic replacements for US technologies. US-based companies like Intel, Nvidia, and AMD are also likely to be hurt, as China is a major market for them.

Kevin Covert, the US Under Secretary of Commerce for Export Administration, said in a Senate subcommittee hearing that the four Chinese companies were added to the export blacklist due to their involvement in enabling the Chinese military’s access to artificial intelligence chips.

In response to the move, a Chinese Foreign Ministry spokesperson criticized the US for using export controls to unfairly target Chinese companies.

The sanctions against the companies underscore the strategic rivalry and security concerns that underpin the US-China relationship. The developments also come amid China’s increasing military spending.

 

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