NVIDIA announced on Thursday, Sept. 1, that the US government would permit it to keep working on China's H100 artificial intelligence chip. This is a piece of good news for the business after warning on Wednesday that new export sanctions would interfere with its operations in the country.
As reported first by CNBC, the US government is limiting sales of the A100 and H100 high-performance AI chips for servers to China and Russia, according to Nvidia in a filing with the SEC on Wednesday.
Although the company can still produce the H100 in China, sales of both chips are still banned in those countries. New export limits will cost Nvidia $400 million in revenue in the current quarter.
SANTA CLARA, CALIFORNIA - MAY 25: A sign is posted at the Nvidia headquarters on May 25, 2022 in Santa Clara, California. Semiconductor maker Nvidia will report first quarter earnings today after the closing bell.
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U.S. Gives Green Light to Continue Development of H100
According to information provided by the government to NVIDIA, the new license stipulation will handle the possibility that Russia and China could use the impacted products for military objectives.
It is worth noting that A.I. and machine learning are employed for a variety of purposes, such as the development of weaponry and surveillance.
"The U.S. government has authorized exports, reexports, and in-country transfers needed to continue NVIDIA Corporation's, or the Company's, development of H100 integrated circuits," the chipmaker wrote in a filing on Thursday.
Artificial intelligence applications, such as weapons development, facial recognition, and other military uses, are well suited for graphics processors like those made by Nvidia and Advanced Micro Devices, as per Bloomberg.
The H100, an anticipated enterprise A.I. chip from Nvidia, was formerly projected to go on sale by the end of the year. A portion of the chips' development is notably in China.
One of the fastest-growing divisions of the chipmaker, Nvidia's data center business-which includes sales of the A100 and H100-reported $3.8 billion in sales in the June quarter, which is a 61% increase year over year.
Nvidia CEO Jensen Huang, meanwhile, forewarned analysts in August that China was a sizable market for the company and that Chinese cloud providers were slowing down the expansion of their data centers. Through September 2023, Nvidia claimed, it may continue to ship A.I. chips from its Hong Kong location.
The new U.S. ban comes after another export control regulation was announced in mid-August and would prevent China from having access to some sophisticated chip design software required to create the next-generation processors.
This latest announcement also demonstrates a significant escalation of the U.S.'s crackdown on several technological abilities of China at a time when tensions are rising over Taiwan, which is responsible for producing chips for NVidia and almost every big chip company.
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Written by Joaquin Victor Tacla
