The US government has instructed tech giant Nvidia to halt shipments of high-end chips to China immediately. This will affect the most advanced microprocessors used for training artificial intelligence (AI) models.
The licensing requirements, announced on October 17th, were originally to be effective after 30 days. However, a company filing reveals that the US Government wants them effective now.
The new regulations by the US Department of Commerce are supposed to close the loophole that allowed tech giants to offer China slightly slowed-down variants of the most advanced chips.
Nvidia, until recently, has offered crippled-down alternatives to its most advanced A100 and H100 chips, named A800 and H800.
Nvidia estimates that shipments of the A100, A800, H100, H800, and the recently announced most advanced L40S products will be affected.
The updated processor performance cap also includes even high-end consumer graphic cards, such as RTX 4090.
To avoid resales to China, preventative measures limit shipment to over 40 countries, including Russia, Saudi Arabia, the United Arab Emirates, Vietnam, and others.
Nvidia doesn’t expect the ban and its accelerated timing to affect financial results meaningfully. While the company may seek a license under new requirements, it has no assurances to get any exceptions.
“Given the strength of demand for our products worldwide, we do not anticipate that the additional restrictions will have a near-term meaningful impact on our financial results,” the previous filing reads.
In the long run, the halt of sales in China may impact “development of products in a timely manner, support existing customers of covered products, or supply customers of covered products outside the impacted regions, and may require the Company to transition certain operations out of one or more of the identified countries.”
Two other US chipmakers, AMD and Intel, haven’t announced any accelerated timelines for the exports of their products. According to Nikkei, the US could be trying to stop any last-minute orders from China for Nvidia's products, which dominate the AI chip market.
Nvidia's share price, pumped up by AI demand, is up by 205% since the start of the year, pushing the company’s valuation above $1 trillion.
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