Since 2020, OpenAI has developed its generative artificial intelligence technologies on a massive supercomputer constructed by Microsoft, one of its largest backers, that uses 10,000 of Nvidia's GPUs.

The US imposed the restrictions last year aiming to slow China's work on supercomputers that can be used to develop nuclear weapons systems and artificial intelligence systems.

Nvidia took the top spot in both absolute performance terms and power efficiency terms in a test of natural language processing, which is the AI technology most widely used in systems like chatbots.

The Dutch firm had 14% of its sales in China in 2022 and has sold more than US$8.46 billion worth of chip lithography equipment in China over the past decade.

Beijing plans to roll out what will be one of its biggest fiscal incentive packages over five years, mainly as subsidies and tax credits to bolster semiconductor production and research activities at home, sources say.

As published, the rules require licences before US exports can be shipped to facilities with advanced chip production in China as part of a US bid to slow China's technological and military advances.

So-called 'is informed' letters allow the Commerce Department to bypass lengthy rule-writing processes to put controls in place quickly, but the letters only apply to the companies that receive them.

The crackdown, if approved, would involve barring the shipment of US chipmaking equipment to factories in China that manufacture advanced NAND chips.

An increased supply of chips will reduce one burden facing an industry that is also battling raw material price inflation, a tight energy market and rising interest rates that are throwing a dampener on consumer demand.

Recent problems in global supply chains have highlighted the fundamental importance of semiconductors, which are used in a growing number of products including cars, TVs and smartphones.

China claims fiercely democratic Taiwan as its own and has not ruled out the use of force to ensure eventual unification.

Apple said sales of its signature iPhone and iPad were held back due to supply constraints, while Amazon struggled to get products and enough workers to meet demand.