According to Reuters, on the 31st local time, Nvidia confirmed that U.S. officials have asked it to stop exporting high-performance computing chips to China for artificial intelligence research, a move that could weaken Chinese companies’ ability to perform advanced technologies such as image recognition and hinder them. Nvidia’s business in China.
The ban concerns NVIDIA’s A100 GPU and H100 GPU, both of which are aimed at AI, data analytics and HPC use cases and are the engines of NVIDIA’s data center platform.
AMD also told Reuters that it had received new license requirements that would ban the export of MI250 chips to China, but that MI100 chips would not be affected. AMD does not believe the new ban will have a material impact on its business.
Nvidia’s statement at the SEC stated that the U.S. government notified it on August 26 to implement new licensing requirements for future exports of A100 and H100 GPUs to China and Russia, effective immediately. Licensing restrictions also include DGX or all systems containing the A100, H100, A100X, and any future Nvidia chip that achieves peak performance greater than or roughly equivalent to the A100. The new licensing requirements may affect the company’s ability to complete the development of the H100 in a timely manner or support existing customers of the A100, and may require the company to relocate certain operations outside of China. The company is working with USG and is seeking waivers for in-house development and support activities.
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Nvidia also said it included about $400 million in potential sales to China in its fiscal third-quarter outlook. Currently reaching out to customers in China and seeking to use products that are not subject to the new license requirements for their planned or future purchases of the company’s data center products. If a customer requires a product covered by the new licensing requirements, the company may apply for a license for the customer, but there is no guarantee that USG will grant any exemption or license to any customer, nor that USG will act in a timely manner.
Nvidia said U.S. officials revealed the new rules would address risks involving products that could be used or diverted to China for military use or customers.
The Commerce Department would not say what standards it sets for the new ban, but said it was reviewing its China-related policies and practices. A spokesperson told Reuters: “While we cannot outline specific policy changes at this time, we are taking a comprehensive approach to implementing additional actions related to technology, end-use and end-users to protect U.S. national security and foreign policy interests.”
Bernstein analyst Stacy Rasgon said about 10% of Nvidia’s data center business sales come from China, and for Nvidia, the impact is manageable. Investors have been closely watching Nvidia’s data center business in recent years.
When the ban was issued, Nvidia saw its first decline in revenue in nearly two years, and profits continued to decline. Nvidia attributed the decline in performance to the gaming business, but many market analysts believe that the turmoil in the cryptocurrency market is behind it.
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