The U.S. imposed export controls last month, impacting Nvidia’s sales of two AI chips designed specifically for China last year, the A800 and H800, to meet earlier restrictions.
Nvidia is set to unveil new AI chips tailored for the Chinese market, adapting to recent U.S. restrictions on high-end AI chip sales to China. According to SemiAnalysis, a chip industry newsletter, the upcoming models—HGX H20, L20 PCIe, and L2 PCIe—could be revealed as early as Nov. 16. Following the news, Nvidia’s stock rose by 3.3%.
These upcoming chips retain many of Nvidia’s advanced AI features but have reduced computational abilities to align with the latest U.S. regulations, as assessed from the chip specifications by SemiAnalysis.
The new regulations limit the computational capacity chips can have within a certain physical size and introduce a ‘grey zone’ where chips might be exportable with a licence. Wells Fargo analyst Aaron Rakers notes that while all three of Nvidia’s anticipated chips seem to comply with the power limits, one may fall into this grey zone, potentially requiring a licence.
Rakers suggests that Nvidia’s initiative could be seen as positive but raises concerns about the company’s aggressive strategy to navigate U.S. limitations, which might provoke further actions by the U.S. government. He points out that China accounts for around one-quarter of Nvidia’s data centre chip sales.
Nvidia’s top gaming chip, the RTX 4090, is also impacted by these regulations, as confirmed by Nvidia. The company stated on Oct. 24 that the restrictions would be effective immediately, an acceleration of the original schedule.
With Nvidia holding over 90% of China’s $7 billion AI chip market, analysts predict the U.S. restrictions will benefit local competitors like Huawei Technologies. Baidu, the Chinese internet giant, reportedly placed a significant order for Huawei AI chips earlier this year, anticipating a time when it might not be able to source from Nvidia due to U.S. regulations.