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On Tuesday, the Biden Administration stated that it had plans to halt shipments of more advanced artificial intelligence chips designed by NVIDIA and others to China. This is part of a suite of measures that is aimed at stopping the Chinese from getting cutting-edge US technologies to strengthen their military.
These new measures are aimed at hampering China’s military development by closing some loopholes in the regulations that the Biden Admin released last October. The Commerce Department Secretary, stated that these regulations would likely be updated “at least annually”. Secretary Raimondo also stated that the goal here is to limit China’s access to “advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to Chinese military applications.”
Secretary Raimondo also stressed that the US was not seeking to hurt China economically with these moves.
NVIDIA’s China-only chips are a hit
Despite the imposition last year, NVIDIA’s business has soared since, because its China-only chips are still better than the alternatives out there. NVIDIA is still selling almost every chip it can procure, because there’s still a shortage of GPU’s and AI chips, and they are selling for more than their MSRP still.
NVIDIA’s A800 and H800 chips are due to be hit by these new regulations, and that’s due to a change in the chip parameters here. Which is aimed at capturing a greater number of chips. The new rules will exempt most consumer chips used in laptops, smartphones and gaming, though some will need to be licensed and there are some notification requirements by US officials.
NVIDIA did say in a statement that it does not expect that these changes to the regulations will have a “near-term meaningful impact” to its financial results. And it also stressed that it does comply with regulations put out by the US.
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