Home Technology Nvidia Says US Order Restricts Sales of AI Chips to China

Nvidia Says US Order Restricts Sales of AI Chips to China

Nvidia Says US Order Restricts Sales of AI Chips to China

Nvidia has been ordered by the US government to restrict sales of two AI acceleration chips to China, disrupting a business the chip designer expects to generate about $400 million in sales this quarter, the company said in a regulatory filing Wednesday.

The order, in the form of new licensing requirements and effective immediately, affects the company’s A100 and forthcoming H100 processors, which let AI developers speed up their research and build more-advanced AI models. The order could also interfere with the company’s ability to complete development of the H100 “Hopper” processor in a timely manner, Nvidia said in a filing with the US Securities and Exchange Commission.

The US government said the new licensing 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,” Nvidia said in its filing, adding that it doesn’t sell products to customers in Russia.

The order comes amid escalating tensions between the US and China, which claims neighboring Taiwan as its own. China recently concluded a series of war games that included launching ballistic missiles into the waters surrounding Taiwan.

The H100, expected to launch this year, is intended to better help researchers tackle complex challenges like understanding human language and piloting self-driving cars. Nvidia estimates the H100 is six times faster overall than the A100 predecessor the company launched two years ago.

The company said it had expected approximately $400 million in sales to China during the third quarter but indicated that figure may be impacted by customers being unwilling to purchase alternative products. Nvidia’s stock was down nearly 6% in after-hours trading.

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