In recent years, Nvidia has been greatly affected by restrictions, especially its business in the mainland market. In order to meet export control regulations, NVIDIA also specially provides a "downgrade" version of the A800 chip to meet the GPU needs of Chinese companies.
I originally thought that this would make a transition, but the development of things was not expected by NVIDIA. Recently, foreign media said that the US Department of Commerce will expand the scope of AI chips, and A800 chips may be limited.
According to the Wall Street Journal, citing two people familiar with the matter, the Biden administration is considering further tightening the export control of artificial intelligence (AI) chips by US companies to Chinese companies. The report said that the US Department of Commerce may take action as soon as early July, requiring Nvidia and other chip companies to stop exporting relevant chips to Chinese customers without obtaining licenses.
According to the report, U.S. chipmakers such as Nvidia, Micron and AMD could all be affected by the new measure. The action will be part of a codification and expansion of export control measures announced in 2022, people familiar with the matter said.
In other words, on the basis of the previous one, the scope of limited sales has been expanded. This means that NVIDIA's A800 and H800 chips for Chinese customers are likely to require additional sales authorization requirements.
NVIDIA responded: the consequences are serious!
After the news spread, Nvidia Chief Financial Officer Colette Kress responded that the move could have serious consequences. Even, she believes, the move "will lead to a permanent loss of opportunities for the U.S. industry."
Colette Kress said that in the long run (in the benefit), if the Biden administration imposes restrictions prohibiting the sale of data center graphics processing units to Chinese companies, it will lead to the permanent loss of competition and leading opportunities for the US industry in one of the world's largest markets, and affect our future business and financial performance.
In fact, the impact was already visible on the day of the incident. According to Reuters on June 29, after the news of expanding sales restrictions, on the 28th local time, NVIDIA's stock price closed down 1.8%.
Of course, the consequences referred to by NVIDIA are serious, but it is not for fun, and the impact is indeed not small.
First of all, if the "downgrade" chips such as the A800 cannot be exported to Chinese companies, it will have a profound impact on NVIDIA's business and financial performance.
According to Bank of America analyst Vivek Arya, if A800 and H800 data center chip sales require additional licensing requirements, the company's 7% of total revenue and 10% of data center sales could be affected. This is unpopular for Nvidia, and the Chinese market accounts for nearly 30% of Nvidia's revenue, which means that so much share is restricted.
More importantly, if NVIDIA cannot sell GUP chips to Chinese customers, it will affect NVIDIA's customer relationship with China. NVIDIA will not be able to establish closer cooperation with Chinese customers, which will limit NVIDIA's competitiveness in the global market.
Secondly, if Nvidia and other US companies stop selling GUP chips to Chinese customers, it will have a certain impact on the economic and trade relations between the two countries, and will also affect the global chip industry.
In fact, China and the United States are important trading partners, and the trade dispute between China and the United States has been going on for some time. If NVIDIA stops selling GUP chips to Chinese customers, it will further aggravate the trade dispute between China and the United States, which will affect the global economic and trade order and stability.
Moreover, such restrictive measures will not only harm the legitimate rights and interests of Chinese companies, but also affect the interests of American companies, which may have a certain impact on the global chip industry. Because China is one of the world's largest chip markets and a part of globalization, further-for-tat confrontation by the United States will affect the global economic and trade order and stability.
Of course, artificial intelligence is one of the main application areas of GPUs, and China's artificial intelligence industry is also developing rapidly. If American companies such as NVIDIA cannot export GPU chips, in the short term, it will also have a greater impact on the mainland's AI industry.
In short, this move by the US side is not good for any party, and it is more likely that it will only block itself and eat itself back. Of course, as long as we insist on self-research on the core technology in this field, no one can stop our development in the future.