Nvidia downplays potential U.S. chip export restrictions

According to The Wall Street Journal, the U.S. is contemplating restrictions on exporting AI chips to China, potentially impacting Nvidia, the leading provider of graphics processors used in AI applications such as ChatGPT.

During a financial conference on Wednesday, Nvidia’s CFO Colette Kress minimized the potential impact of export restrictions, stating that they would not have an immediate financial impact. However, she expressed concern that additional restrictions could impede the company’s future growth.

Following Kress’ comments, Nvidia’s stock initially showed signs of recovery before ultimately declining by approximately 1.8% on Wednesday. Despite this, the company’s shares have risen over 179% since the beginning of 2023.

Kress acknowledged the reports about potential export restrictions on Nvidia’s A800 and H800 products to China by the U.S. Department of Commerce. However, she expressed confidence in the strong global demand for their products and stated that any additional restrictions, if implemented, would not have an immediate significant impact on the company’s financial results.

According to Kress, China represents approximately 20% to 25% of Nvidia’s data center revenue, which amounted to $4.28 billion in sales during the first quarter. This revenue includes various chips, not solely those utilized for AI, encompassing networking components as well.

Kress expressed concern that potential restrictions on selling Nvidia’s data center products to China could have long-term implications for the company’s growth prospects. She emphasized that such restrictions, if implemented, could result in a permanent loss of opportunities for the U.S. industry to compete and lead in one of the world’s largest markets, potentially impacting Nvidia’s future business and financial results.

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As the leading provider of essential components for advanced AI systems, Nvidia’s A100 and new H100 chips are highly sought after by AI engineers. In an effort to maintain a technological advantage, Washington has been actively working to restrict Chinese access to Nvidia’s technology, aiming to prevent the region from narrowing the gap with the U.S.

According to the Journal, Nvidia had previously made modifications to its A800 and H800 chips to adhere to U.S. export controls. However, the Commerce Department’s new limitations could potentially further restrict the export of these chips.

Source : cnbc.com

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