Nvidia new gaming chip for China complies with US export controls

Nvidia new gaming chip for China complies with US export controls

U.S.-based chipmaker Nvidia (NASDAQ: NVDA) has announced the launch of a new gaming chip tailored explicitly for Chinese consumers in a move designed to comply with stringent export controls laid by the U.S. government.

Based on a Reuters report, Nvidia’s new chip will be available to consumers in mainland China in January after months of interfacing with U.S. authorities. Nvidia describes the GeForce RTX 4090 D as a “quantum leap in performance” enhanced with artificial intelligence (AI) capabilities.

The new gaming chip, priced at 12,999 yuan ($1,842), is a step down from Nvidia’s RTX 4090 chip, which is currently unavailable to Chinese consumers. Placed side by side, the new chip for the Chinese market is “5% slower in gaming and creating” than its predecessor but is still enough to scale through stringent export rules.

“The GeForce RTX 4090 D has been designed to fully comply with U.S. government export controls,” said a company spokesperson. “While developing this product, we extensively engaged with the U.S. government.”

In mid-2023, the U.S. Department of Commerce announced the ban on selling advanced AI chips to China on national security concerns. The export embargo restricts the sale of
Nvidia’s H800 and A800 chips to China, affecting its RTX 4090 ultra-modern gaming chip. China constitutes a chunk of Nvidia’s revenue, holding a staggering 90% share of the country’s chip market.

Despite the ban, Nvidia says its recent impressive figures are primarily driven by a global AI boon, with the decline in block reward mining doing little to affect company metrics.

To stay in the market, Nvidia has been probing ways to circumnavigate U.S. authorities’ export ban, including developing a new range of chips. Reuters reports that Nvidia will roll out two new tailor-made chips for China in the coming months.

“[Nvidia] can, will and should sell AI chips to China because most AI chips will be for commercial applications,” said U.S. Commerce Secretary Gina Raimondo. “What we cannot allow them to ship is the most sophisticated, highest-processing power AI chips, which would enable China to train their frontier models.”

China looks inward

Chinese authorities have fired a few shots since the U.S. embargo, including imposing export restrictions on raw materials for chip manufacturing.

In September, China unveiled a plan to build a semiconductor factory in a valiant attempt to replace Nvidia’s chips, proceeding to develop a particle accelerator with advanced technologies.

“One of the potential applications of our research is as a light source for future EUV lithography machines,” said one researcher at the time. “I think this is why the international community is paying close attention.”

Despite these issues in AI chips, China’s generative AI market is thriving, with several tech companies launching their offerings to consumers under the hawkish eyes of regulators.

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