Nvidia, a leader in GPU design, announced on Wednesday, August 31, that it has been ordered by the US government to stop exporting certain chips to China and Russia. The affected products are the A100 and H100 chips, designed specifically to accelerate artificial intelligence-related computing. The A100 has established itself as the benchmark in the sector and the H100, announced this year but not yet on the market, should replace it.
This decision could seriously limit the capabilities of these two countries both in terms of research and specific applications, in particular for large-scale image recognition. If there are any large technology companies in Russia, such as Yandex, then, first of all, the Chinese ecosystem risks being seriously affected. The US government reportedly told Nvidia that the goal is to prevent its products from being used for military purposes.
It will also affect the turnover of the company based in Santa Clara, California. Delivering products for training artificial intelligence models in the data center is now one of the company’s main activities and has been the engine of its growth for 10 years. China will account for about 10% of its sales in the data center market, and the company forecasts $400 million in sales this quarter that could be lost as a result of the ban.
He is no longer in top shape after the cancellation of the Arm acquisition due to regulatory lockdowns and sluggish results, officially due to the dying gaming market, and in fact also (or even especially) due to the downturn in the cryptocurrency market.
Note that AMD, Nvidia’s main GPU competitor, should have received similar instructions for its MI250 chips, according to Reuters. However, the company will suffer less than its competitor, because in fact, the vast majority of AI-related computing accelerations today are performed on Nvidia hardware.
… Against the backdrop of tensions around Taiwan
This US government order highlights heightened tensions with the two countries, apparently in the context of the war in Ukraine, and as the Chinese government’s rhetoric becomes increasingly belligerent towards Taiwan, the world’s nerve center for manufacturing electronic components. .
TSMC, which makes chips for Nvidia, Apple and Qualcomm, is Taiwan’s national flagship. Efforts by both the US and European sides to relocate electronic chip manufacturing capacity are also closely linked to tensions with China and the threat looming over Taiwan.
The Russian government has not yet responded. For its part, the Chinese government denounced Reuters as a “technology embargo” by the United States and warned against destabilizing global supply chains. True, this is not the first measure taken by the US government against China.
In 2020, the Trump administration imposed tough sanctions on Huawei, banning domestic companies from supplying its technology. Once a world leader in smartphones and telecommunications equipment, the company is now in a very bad state. Some Chinese machine learning companies could also be in a dangerous situation if the announced measures are tightened (i.e. extended to all GPUs).
Julien Bergounhoux @JBergounhoux