US adds Inspur – friend to Intel, IBM, Cisco and hyperscalers – to export ban list
Loongson, China’s most advanced chipmaker and a desktop contender, also added to entity list
The US Department of Commerce last week added Inspur Group to its entity list of Chinese businesses that US orgs can only work with after securing a licence – a move with the potential to cause significant strife for US tech giants.
A March 3 update [PDF] to the entity list named Inspur and Loongson "for acquiring and attempting to acquire US-origin items in support of China's military modernization efforts."
Inspur is an original design manufacturer that happily offers its creations to third parties to sell under their own brands, as well as selling systems itself. It is also an original equipment manufacturer that vendors can hire to build kit using their own designs.
Many big US tech players work with Inspur: IBM and Cisco have joint ventures with the Chinese outfit. Microsoft has worked with Inspur to develop an Azure Stack HCI offering. Intel and AMD both court Inspur, motivated by the Chinese builder almost certainly supplying servers to hyperscale clouds. The Open Compute Project has collaborated with Inspur on designs and systems.
We could add to the list in the paragraph above, but you get the idea: Inspur and the US tech industry are well-acquainted – perhaps a little co-dependent in some fields.
And now those US businesses are effectively banned from working with their Chinese partner.
- US sanctions fail to stop Russia connecting with Cisco hardware
- China shops around US bans to power its nuclear weapons research program
- US pressures Asian allies to join crusade against Chinese chipmakers
- HPE to offload remaining stake in Chinese joint venture H3C
The addition of Loongson to the entity list is also significant because the Chinese chipmaker is the nation's most advanced, having developed its own MIPS-compatible LoongArch instruction set and reportedly used it to power processors said to rival the performance of 11th-gen Intel desktop silicon.
If those reports are correct, and Loongson is close to delivering products that would make Intel and AMD less important to China's tech ecosystem, US sanctions would lose much of their bite.
Loongson landing on the entity list may slow its delivery of products and/or further impede China's hoped-for achievement of technological self-sufficiency.
All Chinese businesses can be compelled to act by China’s government, and are therefore connected to the nation's military. But the entity list doesn't explain specifically how Loongson and Inspur support China’s military modernization efforts.
Merely selling them kit could be enough to earn the US's ire. Inspur could hardly ignore a customer as large as the 2.8-million strong People's Liberation Army, which is a prime candidate to rid itself of Windows and adopt Kylin Linux and locally made chips on the desktop.
China's weekend declaration that it will accelerate its tech self-sufficiency drive therefore looks very well-timed.
But the listing of Inspur won't be welcomed by US tech titans at a time of slow infrastructure sales: IBM, Intel, and Cisco will doubtless lament losing access to a major market. ®