Restricting the sale of Nvidia chips to China does not

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US restrictions on Nvidia chip sales to China will not affect Chinese electric car companies because they use automotive systems that do not include the sanctioned products, according to CNBC.

Shares of chipmaker Nvidia fell about 13 percent this week after the company revealed new U.S. restrictions on its exports to China, affecting about $400 million in potential sales in the current quarter.

In China, Nvidia’s Drive Orin chip has become an essential part of electric car makers’ assisted driving technology. These semi-autonomous driving systems are an important selling point for companies in what has become a highly competitive market in China. Some car manufacturers also use Nvidia’s Xavier chip. Automotive is a relatively small but fast-growing part of Nvidia’s business.

However, the new US restrictions target Nvidia’s A100 and H100 products – and sales of these chips are part of the company’s much larger data center business. The products are graphics processors that can be used for artificial intelligence.

“There should be no restrictions on Xavier and Orin, and Xpeng, Nio and others will continue to ship with those chips,” said Bevin Jacob, a partner at investment and advisory firm Automobility in Shanghai.

However, Jacob warned that there could be “close scrutiny” in the future of US companies shipping chips related to artificial intelligence and autonomous driving to China.

Xpeng declined to comment. Nio, Li Auto, Huawei and Jidu — a new electric vehicle brand backed by Baidu and Geely — did not respond to requests for comment.

The new US rules are designed to reduce the risk of supporting the Chinese military, according to the US government, Nvidia said in its filing with the Securities and Exchange Commission on Wednesday. But it’s unclear what prompted this particular policy move or what might drive future ones.

In another positive sign for the chipmaker, the US will allow Nvidia to continue developing its H100 artificial intelligence chip in China, the company said on Thursday.

“The US government has authorized exports, re-exports and domestic transfers necessary to continue development of H100 integrated circuits by NVIDIA Corporation, or by the Company,” Nvidia said in a filing on Thursday.

The company said second-quarter revenue for its automotive business was $220 million, up 45 percent from a year earlier.

“Our automotive revenue is leveraged and we expect it to be our next billion-dollar business,” Nvidia CEO Jensen Huang said in an earnings call in late August, according to a StreetAccount transcript.

WeRide, a self-driving technology start-up, said there was “no immediate impact of the ban”.

“We believe that both supply and demand in the industry will work closely together to manage the ever-changing business environment to protect the continued development of technology,” the company said in a statement to CNBC.

Pony.ai, another self-driving startup, said it was unaffected, as did automaker Geely.