NVIDIA gets US license to export AI chips to China
What's the story
NVIDIA has received a US government license to export a limited number of its H200 chips to China. The move is part of the tech giant's strategy to re-enter the world's largest semiconductor market. However, this comes with conditions such as inspection in the US and a 25% duty on shipments.
Market speculation
Uncertainty looms over China's acceptance of shipments
Despite the US government's approval, it remains unclear if China will accept these shipments. This uncertainty has prompted NVIDIA to exclude any potential revenue from its first-quarter sales outlook for China-based data centers. "While small amounts of H200 products for China-based customers were approved by the US Government, we have yet to generate any revenue, and we do not know whether any imports will be allowed into China," said Colette Kress, CFO of NVIDIA.
Market challenges
Political tensions and potential AI chip market impact
Political tensions between Beijing and Washington have hampered NVIDIA's ability to sell its top-tier chips in China. This is a major blow considering the potential of China's AI chip market, which could be worth $50 billion in the coming years. Despite these challenges, Chinese authorities have reportedly told major tech companies like Alibaba Group Holding Ltd. that they can prepare H200 orders.
Local competition
Chinese government supports local tech firms
The Chinese government is backing local tech firms such as Huawei Technologies Co., Cambricon Technologies Corp., MetaX Integrated Circuits Shanghai Co., and Moore Threads Technology Co. This move could pose a long-term threat to the global AI industry structure. "Chinese chipmakers have the potential to disrupt the structure of the global AI industry over the long term," Kress said, echoing previous comments from NVIDIA executives.