By Karen Freifeld and David Shepardson
WASHINGTON (Reuters) -The United States added six subsidiaries of Inspur Group, China’s leading cloud computing and big data service provider, and dozens of other Chinese entities to its export restriction list on Tuesday.
The Inspur units were listed for contributing to the development of supercomputers for the Chinese military, the Commerce Department said in a posting. Five of the subsidiaries are based in China and one in Taiwan. Inspur Group itself was placed on the list in 2023.
The Inspur units are among about 80 companies and institutes added to the export control list on Tuesday. Over 50 are based in China. Others are in Taiwan, Iran, Pakistan, South Africa and the United Arab Emirates.
The listings are intended to restrict China’s ability to develop high-performance computing capabilities, quantum technologies and advanced AI, and impede China’s development of its hypersonic weapons program.
"We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives," U.S. Commerce Secretary Howard Lutnick said.
China’s foreign ministry in response to an enquiry on Wednesday condemned the U.S. move and said the country will take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.
The move is "not conducive to creating an atmosphere for the two sides to solve problems through dialog and cooperation," China’s commerce ministry said in a statement on Wednesday.
The Chinese embassy in Washington said on Tuesday that it firmly opposed "these acts taken by the U.S. and demand that it immediately stop using military-related issues as pretexts to politicize, instrumentalize and weaponize trade and tech issues."
The Inspur Group did not immediately respond to a request for comment.
The United States also seeks to disrupt Iran’s procurement of drones and related defense items and prevent development of its ballistic missile program and un-safeguarded nuclear activities.
The government adds companies to the Commerce Department’s Entity List for national security or foreign policy concerns. Companies cannot sell goods to those listed without applying for and obtaining licenses, which are likely to be denied.
Commerce official Jeffrey Kessler said the administration aims to prevent "U.S. technologies and goods from being misused for high performance computing, hypersonic missiles, military aircraft training, and UAVs (drones) that threaten our national security."
When Inspur Group was placed on the list in 2023, executives from AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) were questioned about their dealings with the company. At the time, chip industry insiders and their advisers said firms were trying to assess whether they had to halt supplying Inspur’s subsidiaries.Reuters could not immediately determine whether the U.S. companies continued to do business with the subsidiaries.
Nvidia declined to comment and AMD did not immediately respond to a request for comment.
Chinese firms Nettrix Information Industry Co, Suma Technology Co and Suma-USI Electronics are among the other companies added to the list. The United States said they were added for helping develop Chinese exascale supercomputers, which can process vast amounts of data at very high speeds and conduct large-scale simulations.
The companies have also provided manufacturing capabilities to Sugon, also known as Dawning Information Industry Co, a computer server manufacturer added to the Entity List in 2019 for building supercomputers used by the military, the Commerce Department said.
The companies could not immediately be reached for comment.
Other companies were added to the list for acquiring U.S.-origin items to advance China’s quantum technology capabilities and for selling products to companies that supply other listed parties, including Huawei, the tech conglomerate viewed as at the center of China’s AI ambitions.
The Beijing Academy of Artificial Intelligence (BAAI), a Chinese non-profit new research and development institution that was also targeted by the United States, said on Wednesday that it was shocked and demanded that relevant U.S. departments withdraw the "wrong" decision.