US Walks Back Stern Warning To NVIDIA Over China-Bound AI Chips

Potential buyers of NVIDIA's GeForce RTX 4090 can breathe a slight sigh of relief with news of leniency towards the GPU designer's AI GPUs for the Chinese market. Why is that? When restrictions are tough on data center GPUs, we've seen enterprising companies go as far as stripping down GeForce RTX 4090 gaming GPUs in desperation for AI use, which if left unchecked, could cause a shortage (similar to how cryptocurrency miners ravaged the gaming GPU market a few years ago). However, officials are now taking a slightly softer stance on NVIDIA's sales of GPUs to China as long as it can stick to the rules.

It appears as though NVIDIA's biggest competition is not any other GPU manufacturer, but itself. Realizing this, the United States Government has issued stern warnings in the midst of the restrictions of ultra-powerful AI data center GPUs. Not wishing China to get the most advanced hardware for fear of being outpaced, NVIDIA has fallen squarely in the middle of this national security debacle. 

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The issue is a simple battle of NVIDIA's desire for maximizing sales and profits, with concerns of United States national security. When officials restricted the most powerful GPUs from being sent to China, knocking out a large portion of potential revenue for NVIDIA, an alternative plan was needed. NVIDIA has of course responded by creating chips that would skirt right under the new restrictions. Still powerful, these chips would limit their capabilities so that they technically follow the guidelines. 

Even the gamer-centric GeForce RTX 4090 was affected by these bans due to its VRAM prowess. Reports surfaced of a cut-down GeForce RTX 4090D for the Chinese market, one minor example of changes potentially made by NVIDIA. The much more powerful data center GPUs are what worry U.S officials the most, however, which is why NVIDIA had received a stern warning from U.S Commerce Secretary Gina Raimondo. 


In a recent interview, Raimondo stated that NVIDIA "can, will and should sell AI chips to China because most AI chips will be for commercial applications." She clarified that they want to avoid China receiving the most advanced AI chips that could be used for more serious applications, which would affect national security.

Officials certainly will keep a keen eye on NVIDIA to make sure they do not redesign chips in such a way to bypass restrictions for the higher-end GPUs. NVIDIA therefore must tow a careful line between its sales and not upsetting the United States Government, who has the power to control its GPU output if rules are not followed.