Published , by Ozzie Mejia
Published , by Ozzie Mejia
NVIDIA (NVDA) has reportedly heard from the United States government in regards to its exports to China. On Wednesday, the government imposed new license requirements on NVIDIA for any future exports to China, which also includes Hong Kong. The new restrictions will apply to the company's line of A100 and H100 chips.
The following is an excerpt from a United States Securities and Exchange Commision report issued on Wednesday:
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 chipto-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 news was first reported by Reuters late Wednesday afternoon. The A100 and H100 line of chips are said to relate to AI and machine learning. While NVIDIA previously announced expectations to ramp up new GPU, CPU, DPU, and robotics processors during the recent Q1 2023 financial report, the company cautions that the new restrictions could affect the completion of the H100 chips.
NVIDIA now appears to be caught in an escalating conflict between the United States and China. NVIDIA (NVDA) shares closed at $150.94 per share, down 2.42 percent, and appear to be falling further in afterhours trading.
We'll continue to monitor this story as it develops, as further U.S. government restrictions could stand to affect both NVIDIA and competitor AMD in both the short and long-term futures.