The US Department of Commerce imposed new export restrictions on a range of Nvidia GPUs, with a continued focus on preventing shipments to China. In addition to selected AI chips, the gaming-focused GeForce RTX 4090 has also made the list. Nvidia's stock plummeted by nearly 5% after the announcement on Tuesday.
The list of GPUs affected includes Nvidia's A100, A800, H100, H800, L40, L40S, and RTX 4090 chips. Funnily enough, the A800 is a chip that Nvidia specifically designed to comply with US export standards. It operates at roughly 70% of the speed of A100 GPUs, and received mass orders from China in 2022 over fears that the Biden administration would further tighten restrictions. Those fears have now been realised, and the nerfed A100 is not available to China anymore.
The ban is not limited to China alone, and the export restrictions have been expanded to more than 40 countries. Unsurprisingly, the list features Saudi Arabia and the United Arab Emirates; these countries recently ordered thousands of H100 chips in their bid for AI supremacy.
US Commerce Secretary Gina Raimondo explained that the updates aim to control China's access to military-grade chips. The concern is that these GPUs could be leveraged in ways that threaten the US and its allies, particularly in military applications and modernisation efforts. Raimondo emphasises that these restrictions are not intended to harm Chinese economic growth but rather to protect national security interests.
Nvidia CFO Colette Kress downplayed the potential impact of these new restrictions on its financial results. She believes the export restrictions will have no "immediate financial impact" given the worldwide demand for their products.
China has been investing heavily in its domestic chip development and production. In September, they launched a $40-billion state-backed fund to boost local chip manufacturing. Despite the sanctions, China's biggest chipmaker, SMIC, posted record revenue in 2022. The foundry operator already has the ability to produce 14nm chips at scale, and they've made significant progress on 7nm chip manufacturing.
The long-term consequences of the US export ban on Nvidia GPUs remain uncertain. It is difficult to predict how the situation will evolve over time. China's determination to enhance its domestic chip industry and the possibility of retaliatory economic measures further complicate the outlook. For now, it seems that China's ability to produce its own advanced silicon has been temporarily frozen due to these export restrictions.