Hong Kong: The biggest chip maker in the world, Nvidia, has just taken the charge of $5.5 billion for the reason that its AI H20 chip was denied U.S. government exports to China. The latest move brings with it a tech rivalry between the U.S. and China with the setting up of exports for national security and to gain supremacy in the development of AI technology.
Under old export regulations, the H20 chip had been intended for China but was becoming increasingly popular with tech giants like Tencent, Alibaba, and ByteDance as it was being more widely deployed in AI inference tasks-at-that-are-growing-the-fastest-in-AI. For all its restrictions in training AI models, H20_IDENTIFIER raised concerns about being appropriated in building supercomputers due to speed and data connection output capacity, and were not all that great in inference.
On April 9, 2023, the U.S. Commerce Department notified Nvidia that a new rule regarding H20 chips would require a license for their export to China. In a clarification made on April 14, 2023, it would be stipulated that this ruling would apply indefinitely. Speculation around licenses being granted remains highly doubtful according to a host of analysts and policy experts.
Thus, shares of Nvidia fell 6% in after-hours trading, while those of AMD, also subject to the same restrictions, fell 7%. The $5.5 billion charge supposedly contains all inventory, purchase commitments, and reserves relating to the H20 chip
Yet, despite the short-term climate, Nvidia has heavily invested in AI servers in the United States, planning up to $500 billion investments with partners, including TSMC, to put into projects over the next four years. This is part of the U.S. government's push for domestic tech manufacturing.
[Source Credit: Business Recorder]
