US Government Restricts Sales of Nvidia’s Chips to China

Daniel Attoe
Daniel Attoe

Updated · Sep 01, 2022

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The company said on Wednesday that it had received instructions to stop selling certain chips in China. Its shares fell 6.5% in after-hours trading following the disclosure.

“Tech Blockade”

United States-based graphic card designer Nvidia has revealed that officials have informed it to stop the exportation of two AI chips to China. It is a move that American authorities hope will hamstring the growth of Chinese work in areas like image recognition for military use.

Nvidia announced its new flagship H100 line in March, saying it would power the next generation of software products. Now, the company is afraid that the ban, which affects its A100 and upcoming H100 GPUs, will negatively impact that development. 

The chips are designed to rapidly increase the speed of machine learning tasks.

The restriction also applies to Russia, but Nvidia has already stopped selling in that country.

In an SEC filing, the chipmaker revealed that authorities told the company of a new license required for exports to China and Hong Kong.

“The license requirement also includes any future Nvidia integrated circuit achieving both peak performance and chip-to-chip I/O performance equal to or greater than thresholds that are roughly equivalent to the A100, as well as any system that includes those circuits,” the filing said. 

Nvidia is concerned that it will lose as much as $400 million in sales this quarter following the ban.

In response, China has accused the US of attempting to impose a “tech blockade” on the country. 

“The US continues to abuse export control measures to restrict exports of semiconductor-related items to China, which China firmly opposes,” commerce ministry spokesperson Shu Jieting said.

Sources.

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Daniel Attoe

Daniel Attoe

Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.

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