Nvidia, the American chip and technology giant has been ordered by the US Department of Commerce to cease trade with Chinese companies, precluding the sales of its market-leading chips being used in the fields of AI learning and machine vision.
Having established itself as a leader in the field of dedicated computer graphic chips and accelerators – including producing the graphics chip used in the original Xbox – Nvidia moved quickly into wider-ranging computational tasks with AI and in particular using AI for the study and understanding of images being a major area of growth.
Nvidia tech is at the cutting edge of machine learning and is set to play a major part in the future world of autonomous driving, home automation and robotics, security and surveillance.
Clearly – given the frosty state of world relations at present – the US government now feel that handing such tech to an unfriendly party with the potential for it to be used against America and its allies isn’t a good move.
And with uncertainty regarding China’s status with Taiwan – home to much of the world’s semiconductor industry – the final straw appears to have been broken.
Inevitably the move will not only hamper China’s work in these fields but will also impact Nvidia’s reach and research into the area. Nvidia shares fell 6.6% after hours on the day of the announcement while its rivals AMD also incurred a dip of 3.7% as its newer MI250 artificial intelligence chips were banned from Chinese sale.
AMD’s older MI200 chips remain unaffected, while Nvidia’s newer A100 and H100 are banned from sale, a move that Nvidea say will impact $400m of previously agreed deals.
U.S. officials told Nvidia that the new ruling “will address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China.”
The move joins further bad news for Nvidia as the company had already predicted a drop in revenue for the current quarter as a result of the weaker, semi-conductor drought-impacted gaming industry.