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Artificial intelligence

Nvidia Chief Condemns US Export Controls, Slams Limitations on AI Chip Sales

Strategic Insights

— 2 min read

The US' attempts to limit China's access to artificial intelligence chips have backfired, according to Nvidia chief Jensen Huang, leading to a surge in Chinese rivals developing their own products. The company has seen its market share in China plummet from 95% to 50% in just four years, with Chinese tech giants such as Tencent and Alibaba accelerating their purchases of domestic AI chips. Washington's restrictions have prompted Beijing to issue guidance to its tech companies to buy local AI chips, reducing dependence on imported technology.

Key Takeaways:

  • Nvidia's market share in China has dropped from 95% to 50% in four years, with Chinese rivals developing competitive AI hardware.
  • Washington's restrictions have led to a surge in Chinese purchases of domestic AI chips, with Tencent and Alibaba accelerating their buying.
  • The US' decision to ban Nvidia's H20 chip for China has resulted in a $5.5bn writedown for the company.
  • Nvidia has no plans to rollout another product in its "Hopper" series for China's market, with the company having "degraded the chip so severely".
  • The US' AI diffusion rule, set to take effect on May 15, would have created a three-tier licensing system for AI chips used in data centres, which has been deemed "fundamentally flawed" by Huang.
  • The US is drafting a new rule that would allow US technology to flourish, but without enabling adversarial nations to access its technology.
  • The Trump administration has rescinded the planned diffusion regulation.
  • The Chinese commerce ministry has lambasted the US' move, calling on the country to "immediately correct its wrongdoings" and stop "discriminatory" practices.

Statistics:

  • Nvidia's market share in China: 95% (4 years ago), 50% (latest data)
  • Value of Nvidia's writedown: $5.5bn
  • Number of Chinese tech giants accelerating their purchases of domestic AI chips: 2 (Tencent and Alibaba)
  • Number of data centres to be built in the US and UAE: largest group outside the US
  • Date of planned effective date of AI diffusion rule: May 15

Sources:

  • The Financial Times: "Beijing issues guidance to tech companies to buy local AI chips"
  • Nvidia chief Jensen Huang quoted by Bloomberg: "Four years ago, Nvidia had 95 per cent market share in China. Today, it is only 50 per cent"
  • The Financial Times: "US and UAE announce plan to build largest group of AI data centres outside US"
  • The Wall Street Journal: "Trump administration rescinds planned AI diffusion rule"
  • The Chinese commerce ministry: "US should 'immediately correct its wrongdoings' and stop 'discriminatory' practices"

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