The trade war between China and the United States is back if it ever went away. US authorities have asked Nvidia to halt exports to China of its A100 and H100 AI (artificial intelligence) chips, designed to speed up machine learning tasks. These chip models are mainly used for image recognition.
The US Department of Commerce has established new criteria to keep certain advanced technologies out of China’s hands. This regulation would seek to tackle the risk that some products could end up being used for military purposes.
Nvidia shares have fallen after the ban was made public. Those responsible for the company warned that, in addition to the serious difficulties that its business in China will experience as a result of this movement, its future developments could also be slowed down. Currently, Nvidia chips are used in fields such as autonomous driving.
However, Nvidia will not be the only company affected by the confrontation between the two superpowers. And it is that its rival AMD has also suffered a stock market crash after learning that it will not be able to export its MI250 chips to China. Unlike in the case of Nvidia, AMD does not foresee a special impact on its business, since it will be able to continue selling its MI100 chips to the Asian giant.
Taiwan makes chips for Nvidia
It should be noted that these prohibitions have occurred amid an escalation of tensions between China and the United States due to the situation in Taiwan, a country that manufactures chips for the vast majority of the world’s industry. Without American AI chips, the ability of Chinese companies to carry out advanced operations will suffer.
Today, image recognition is used both in consumer electronics (smartphones) and in more advanced applications, including some for military purposes. Therefore, the Chinese industry could see its advances in the field of artificial intelligence slow down, although Nvidia has requested exemptions from the corresponding authorities to avoid the millionaire losses that the prohibitions would entail.
Despite this, it seems unlikely that the Department of Commerce will give its arm to twist on this issue. However, some analysts point out that Nvidia’s reliance on the Chinese market is relatively low , so the company is likely to be able to weather the situation.