US forces export restrictions on Nvidia to prevent AI chip shipments to China
The US' restrictions could lose Nvidia $400 million in revenue
Published: 1st September 2022 | Source: US SEC |
The US is blocking Nvidia's AI chip sales to China and Russia, fears military applications
The United States Security and Exchange Commission (SEC) has now blocked Nvidia from shipping its newest HPC-oriented AI chips to China and Russia without a license, blocking the sales of their A100, H100, and future products to both regions. This also includes systems that contain these products.
The US believes that these limitations will help to prevent both of these nations from diverting Nvidia chips towards military use, though the move is expected to risk $400 million in Nvidia's revenue. Currently, Nvidia does not ship any of its chips to Russia, though this ban will restrict any future sales of AI chips.
The SEC's move is also expected to require Nvidia to "transition certain operations outside of China", and Nvidia will require a license to ship their A100, H100 or future HPC chips to customers in both China and Russia. The SEC will be able to deny these licenses should any of these sales present risk to the US.
Below is what the SEC has to say regarding its newly imposed licensing restrictions on Nvidia.
On August 26, 2022, the U.S. government, or USG, informed NVIDIA Corporation, or the Company, that the USG has imposed a new license requirement, effective immediately, for any future export to China (including Hong Kong) and Russia of the Company’s A100 and forthcoming H100 integrated circuits. DGX or any other systems which incorporate A100 or H100 integrated circuits and the A100X are also covered by the new license requirement. 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. A license is required to export technology to support or develop covered products. The USG indicated that the new license requirement will address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China and Russia. The Company does not sell products to customers in Russia.
The new license requirement may impact the Company's ability to complete its development of H100 in a timely manner or support existing customers of A100 and may require the Company to transition certain operations out of China. The Company is engaged with the USG and is seeking exemptions for the Company’s internal development and support activities.
In addition, the Company is engaging with customers in China and is seeking to satisfy their planned or future purchases of the Company’s Data Center products with products not subject to the new license requirement. To the extent that a customer requires products covered by the new license requirement, the Company may seek a license for the customer but has no assurance that the USG will grant any exemptions or licenses for any customer, or that the USG will act on them in a timely manner.
The Company’s outlook for its third fiscal quarter provided on August 24, 2022 included approximately $400 million in potential sales to China which may be subject to the new license requirement if customers do not want to purchase the Company’s alternative product offerings or if the USG does not grant licenses in a timely manner or denies licenses to significant customers.
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Most Recent Comments
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Originally Posted by NeverBackDown
They will just move those shipments to somebody else. Only a loss temporarily.
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Originally Posted by Avet
Not so sure. They already sell to everyone they can. If a China size market disappears you will feel it.
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I believe Ireland is a great trade route for bypassing many regulations.Quote
So until everyone decides to jump ship like they do to somewhere else now china's wages are going higher then it solves nothing and in truth wouldn't change anyway.Quote
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