U.S. ban causes NVIDIA to lose big orders from China: AI chip supply blocked

Drive China News on November 1, 2023. According to the Wall Street Journal, NVIDIA (NVIDIA) was forced to cancel a $5 billion 2024 contract with Chinese customers due to the latest U.S. ban on high-performance computing chip exports taking effect early. Artificial Intelligence (AI) chip orders.

According to reports, NVIDIA is said to have completed the shipment of AI chip orders required by Chinese customers this year. However, affected by the new ban promulgated by the United States on October 17, NVIDIA originally planned to deliver some orders scheduled to be delivered to Chinese customers in 2024 in advance before the ban took effect on November 17

It is reported that Chinese AI and cloud computing giants such as Alibaba Group, TikTok parent company ByteDance and Baidu have previously placed a large number of AI chip orders with NVIDIA, which are scheduled to be delivered in 2024. goods. However, these orders may not be fulfilled on time due to the early entry into force of the ban.

According to a person familiar with the matter, major Chinese manufacturers have booked orders for NVIDIA AI chips worth more than US$5 billion in 2024. However, NVIDIA said in its latest 8K filing with the U.S. Securities and Exchange Commission that the U.S. government issued a notice titled "Implementing Additional Export Controls: Certain Advanced Computing Items; Supercomputers and Semiconductor End Uses; Updates and Corrections." , requiring the immediate implementation of export restrictions on "products with a comprehensive performance of 4800 or above and designed or sold for data centers." This may mean that NVIDIA will not be able to supply high-performance AI chips to Chinese customers in the future

Due to the early effect of the ban, NVIDIA’s original plan to ship to Chinese customers in advance within the 30-day buffer period failed. This also means that NVIDIA will completely lose its $5 billion big order. The latest upgraded ban in the United States restricts most high-performance AI chips from NVIDIA, Intel and AMD, which may slow down China’s development in the field of AI

According to estimates by Bernstein Research, using NVIDIA’s V100 chip launched in 2017 will increase the cost of training artificial intelligence systems by 30%, because it will require more chips and further consume more energy. This may have a negative impact on the development of China's artificial intelligence industry

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