US eases restrictions on Nvidia after banning AI chip exports to China
Nvidia shares ended the week down nearly 15% after the California-based semiconductor maker got caught up in the high-stakes technology battle between the United States and China. US officials have ordered the company to stop exporting two of its best computer chips to China.
But the US followed suit by giving the company a little breathing room — for now.
Nvidia revealed in a filing with the Securities and Exchange Commission (SEC) on Wednesday that the United States notified the company last week of a new license requirement for its current top-performing AI chip, the A100, and its upcoming next-generation AI chip right now. Development, H100.
The move effectively prevents the company from exporting both chips to Chinese customers as the United States seeks to limit the spread to China of technology that could be used to make weapons amid heightened tensions between the two countries.
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Nvidia said licensing requirements could delay its development of the H100, hinder its ability to provide A100s to customers, and could require the company to move some of its operations outside of China, where it expects to generate $400 million in sales in its third fiscal year. Quarter ending in October.
The news sent Nvidia shares tumbling.
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Then, on Thursday, the company filed an amended disclosure in which it said the government had provided some deferment by agreeing to allow exports needed to continue development of the H100 through March 1 of next year, and authorized Nvidia to continue any exports needed to provide subsidies. For US customers from A100 until the same date.
Falling stocks presented a buying opportunity for Cathy Wood. The CEO and CIO of Ark Invest has sold Tesla shares to buy Nvidia, Barron’s reported.
Jefferies analyst Mark Lipasis told Barron that the sale was an “overreaction.” Needham analyst Rajvendra Gill had a different view, describing the license as a “major headwind” for the company.
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The US has also agreed to allow Nvidia to fulfill orders through its Hong Kong facility until September 1, 2023, meaning the company can ship outside of China.
“We are working with our customers in China to meet their planned or future purchases with alternative products and may seek licenses where alternatives are not sufficient,” an Nvidia spokesperson told FOX Business in an emailed statement. “The only existing products to which the new license requirement applies are the A100 and H100 and systems like the DGX that include them.”
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Ken Martina of FOX Business and the Associated Press contributed to this report.