The Trump administration has expanded the restrictions on the export of artificial intelligence chips with high processing power. The new notification by Nvidia revealed that these restrictions are now included in the H20 advanced chips. In order to export for these products, a special license will be required. The document presented by the company to the securities and the stock exchange commission clearly stated that this license will be valid indefinitely.
The possibility that these high -performance chips can be used in super computer systems attracted the attention of US authorities. For this reason, a license application was initiated considering the risk of direct or indirect access to China. The new arrangement is not limited to the main land of China. Special administrative regions such as Hong Kong and Makao have been added to this list.
High trading capacity of Nvidia H20 chips required US audit
However, exports to the countries that the US includes in the D: 5 category, that is, the arms embargo, will now depend on the same permission. Thus, the delivery of H20 chips to many international markets has been seriously limited. The H20 is among the highest capacity artificial intelligence chips that Nvidia can sell within the scope of the current legislation. These products stand out especially in artificial intelligence and machine learning applications.
Nvidia for a long time has taken care to remain within legal limits in order to maintain its activities in the Chinese market. Previously, when the H100 and similar senior chips were banned to China, he managed to exist in this market with alternatives such as H20. However, the new license requirement has closed the front door for these chips. As a matter of fact, a significant contraction may be experienced in the income of the company from China.
Last week, some restrictions on Nvidia could be provided flexibility. However, this expectation has disappeared with the latest notification to SEC. It became clear that the license requirement will be implemented indefinitely. This development seems to lead Nvidia to reconsider chip supply strategies.
Nvidia also made statements about the financial results of the new regulation. The company said it would write an inventory and order obligation of approximately $ 5.5 billion for the current fiscal quarter. These expenses are due to stocks and purchasing agreements connected to H20 chips. Therefore, not only legal, but also a serious impact is mentioned.
This can lead to a search for a new balance in the global artificial intelligence equipment market. The restriction of access to large markets such as China may open the door to filling this gap by other manufacturers. On the other hand, Nvidia can be expected to market these products more aggressively in countries outside China. In addition to all these, the bureaucratic complexity of the undergraduate process may adversely affect the shipment periods.