China AI Chipmaker Moore Threads Cuts Jobs After US Blacklisting

(Bloomberg) -- Moore Threads, a Chinese developer of graphics processors and AI accelerators, is cutting jobs after the US added the three-year-old firm to a trade blacklist last month.

Moore Threads Intelligent Technology Beijing Co. plans to cut a single-digit percentage of its roughly 1,000 employees, according to a person familiar with the plan, who asked not to be named discussing a private matter. In a letter to staff reviewed by Bloomberg News, Chief Executive Officer Zhang Jianzhong said the move was a tough but necessary decision.

Chinese firms from Baidu Inc. to fledgling players such as Baichuan are diverting massive resources toward developing large language models in the wake of ChatGPT, which require training on high-end graphics chips or GPUs. But the US imposed export curbs on Nvidia Corp.’s best AI chips a year ago and expanded those controls this year, focusing attention on homegrown alternatives designed by Shanghai Biren Technology Co. and Moore Threads.

“Nothing will impact our determination to develop the best all-purpose GPU in China,” Zhang wrote. “We will continue this task until the end.”

The impending layoffs suggest the Beijing startup is bracing for the impact of the US blockade, which could bar the Chinese firm from the software and hardware essential to making its products.

Moore Threads and Biren were added to Washington’s so-called entity list last month, which prohibits the sale of US technology without a special license. The heightened US trade restrictions announced Oct. 17 “severely harmed” China’s GPU and AI chip industry, Zhang said in the letter.

The US argues its chip curbs are required to prevent China’s military from obtaining advanced technology. Biren and Moore Threads have both protested their inclusion on the list and said they operate in compliance with all regulations where applicable.