Nvidia, the world’s largest maker of artificial intelligence chips, is at the center of US tech sanctions targeting China.
Nvidia said in an SEC filing that the U.S. government had imposed new export restrictions on its two most advanced AI chips, its second-largest market after Taiwan, which accounts for 26 percent of its revenue by 2021.
The ban could cost Nvidia about $400 million in sales to China in the third quarter, the company said.
Export controls prevent Navi from importing chips into Russia, although the company says it does not currently sell to the country.
The U.S. government said the move “addresses concerns that the covered products may be used or diverted to ‘military end-uses’ or ‘military end-users’ in China and Russia.” But the ban is crippling many businesses and organizations that use silicon beyond the military.
The two chips in question are the Nvidia A100 and H100 graphics processing units. The A100 is designed to provide high-performance computing, storage and networking capabilities to industries in the healthcare, financial and manufacturing sectors, according to Chinese e-commerce and cloud computing giant Alibaba, an A100 user.
The H100 is the company’s upcoming enterprise AI chip, which is expected to ship later this year and is manufactured in China.
Nvidia’s relationship with China will not be completely severed. The U.S. government has authorized Nvidia’s H100 to continue in China, Nvidia said in another filing, although access to Chinese customers remains limited.
Chinese Foreign Ministry spokesman Wang Wenbin criticized the ban at a press conference on Thursday. “The United States wants to use its technological prowess as an advantage to hinder the development of emerging markets and developing countries.”
US moves to restrict China’s access to high-tech technologies have accelerated the latter’s quest for independence. Washington Huawei’s smartphone chip development has doubled since being blacklisted from exports in 2019 over national security concerns. Many domestic semiconductor startups are getting huge investments from VCs and government-led funds.
While China may still be generations behind in producing the most sophisticated chips, the country is slowly catching up with low-end specialty semiconductors, from neural processing units to add-ons to phone cameras. It remains to be seen what kind of ripple effect Nvidia’s ban will create.
