The ongoing tension between the United States and China continues, and this time, it involves new rules for exporting products from the U.S. to China and nearby regions. These restrictions are not new, but they are now becoming stricter. The United States has announced that specific products, like the NVIDIA H20 chip, which were designed especially for the Chinese market, will now require special permission to be exported.
New Export Requirements
The U.S. Department of Commerce has informed NVIDIA that the H20 chip might pose a security risk, which is why it will need an official approval before it can be exported. This new rule will be in effect indefinitely. The H20 chips were already created to meet the export limits and to be sold exclusively in China, but the U.S. government is worried that China might use these chips in military supercomputers.
Impact on NVIDIA and the Market
This decision has upset investors because it could lead to the loss of a market worth around $5.5 billion for NVIDIA. Due to this new export requirement, NVIDIA’s orders are now frozen. In addition, companies in China, like HUAWEI, could take advantage of this situation by offering similar products. Some of these alternative solutions are reportedly not much worse than what NVIDIA provides, which could lead to more competition for NVIDIA in the Chinese market.
