Chipmaker Nvidia plans to sell alternative versions of its A100 chip in China in a bid to comply with export restrictions set by the United States, a decision some experts see as a repackaging effort.
On Aug. 26, the U.S. government informed Nvidia that its data center chip A100 was added to the export control list issued by the Department of Commerce. As a result, the company was prohibited from selling the A100 to Chinese customers without securing approval from Washington. The A100 chips enable artificial intelligence (AI) developers to speed up research and allow them to develop more advanced AI models.
In a statement to Reuters, an Nvidia spokesperson said that its A800 GPU is an alternative to the A100 for customers in China, and meets the U.S. government’s export control restrictions. The A800 went into production during the third quarter.
“The A800 looks to be a repackaged A100 GPU [graphics processing unit] designed to avoid the recent Commerce Department trade restrictions,” Wayne Lam, an analyst at CCS Insight, told the media outlet.
“China is a significant market for Nvidia, and it makes ample business sense to reconfigure your product to avoid trade restrictions.”
The U.S. government implemented export restrictions on chip sales to address the risk of the items being used for military purposes. Chips like the A100 allow data centers to process large amounts of information.
Washington’s rules impose a cap on the speeds at which the chips can communicate with each other, thus ensuring that China does not gain access to high-end chips. Firms are prohibited from selling chips with communication speeds of 600 gigabytes per second and higher.
The chip-to-chip transfer rate of the A800 is said to be 400 gigabytes per second, down from the A100’s speeds of 600 gigabytes per second.
Financial Impact, Nvidia’s Advantage
Nvidia had earlier admitted that limiting chip sales to China would deliver a severe financial blow to the company given that the country is a big market.
The firm estimated around $400 million in potential sales to China in the fiscal third quarter to be affected by the U.S. government’s new licensing requirements. An alternative chip like the A800 is expected to help lessen the negative impact of the restrictions.
Nvidia shares were trading around $145 as of Nov. 7, down by more than 50 percent year to date. The company is scheduled to report its quarterly results on Nov. 16.
An Oct. 11 report by Washington-based think-tank Center for Strategic and International Studies (CSIS) highlighted the importance of Nvidia’s chips in supercomputing.
In the report, Gregory C. Allen, a senior fellow in the Strategic Technologies Program at CSIS, pointed out that Nvidia and AMD are two of the few chip designers in the world that are capable of manufacturing chips for AI or supercomputing with very fast interconnect speeds and powerful parallel processors.
CUDA, Nvidia’s software ecosystem, is used by programmers widely to write massively parallelized software, which encompasses “basically all modern AI software,” he noted.
As such, “any customer who seeks to stop using Nvidia chips has to leave the CUDA ecosystem … [Thus], the combined offering of CUDA software and Nvidia hardware [explained] why Nvidia accounts for 95 percent of AI chip sales in China,” Allen said in the report.
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Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
