Nvidia, the US-based tech giant and the world's leading manufacturer of artificial intelligence (AI) chips, has postponed the launch of its new AI chip for China, according to sources familiar with the matter. The chip, codenamed HGX H20, was expected to be announced as soon as November 16, but has been pushed back to an unspecified date due to the recent US export restrictions on AI chips to China.
The sources, who spoke on condition of anonymity, said that Nvidia was still in talks with the US Department of Commerce to obtain a license to sell the HGX H20 chip to China, but the process was taking longer than expected. The sources also said that Nvidia had already developed two other AI chips for China, the L20 PCIe and the L2 PCIe, based on the design of its flagship H100 product, but they were also subject to the US export controls.
The HGX H20 chip was designed to be a high-performance AI chip for data centers, cloud computing, and supercomputing applications, and was expected to compete with the A800 and H800 chips that Nvidia had previously created for the Chinese market. However, in October 2023, the Biden administration imposed fresh restrictions on the sale of AI chips and manufacturing equipment to China, citing national security concerns. The newly expanded restrictions blocked Nvidia from selling the A800 and H800 chips, as well as one of its top gaming chips, the L40S, to Chinese firms without a license.
The US export curbs have dealt a major blow to Nvidia, which has dominated the Chinese AI chip market with a more than 90% share, according to analysts. China is a key market for Nvidia, accounting for 22% of its revenue last year, according to its financial statements. Nvidia's chief financial officer, Colette Kress, warned in June that the US restrictions would result in a "permanent loss of opportunities" for US industry to compete and lead in one of the world's largest markets, and impact its future business and financial results.
The US export curbs have also created opportunities for domestic Chinese firms, such as Huawei Technologies, to develop their own AI chips and reduce their reliance on foreign suppliers. The Chinese internet giant Baidu placed a sizable order for Huawei AI chips this year, sources said, as it was preparing for a future when it would no longer be able to purchase from Nvidia.
Shares in Nvidia rose 1.8% during pre-market trading in New York on Thursday, following the report of its new AI chips for China. However, the company declined to comment when asked about the report by Reuters.
Source: Conversation with Bing, 11/24/2023
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