Both AMD and NVIDIA have just been banned from selling high-performance AI chips to both China and Russia!
Here is what you need to know…
AMD, NVIDIA Banned From Selling AI Chips To China + Russia!
On Friday, 26 August 2022, NVIDIA and AMD were both ordered by the US government to stop exporting high-performance AI chips to both China and Russia.
In its regulatory filing to the SEC, NVIDIA stated that the US government introduced this ban to prevent them from being used for military purposes, or by the Chinese or Russian military.
The ban uses the A100 Tensor Core GPU as the baseline for NVIDIA, and the 3rd Gen Instinct MI250 accelerator chip for AMD.
Effective immediately, anything equal to, or faster than, the NVIDIA A100 or the AMD Instinct MI250 can no longer be exported to either China or Russia. That includes the upcoming H100 chip.
On August 26, 2022, the U.S. government, or USG, informed NVIDIA Corporation, or the Company, that the USG has imposed a new license requirement, effective immediately, for any future export to China (including Hong Kong) and Russia of the Company’s A100 and forthcoming H100 integrated circuits.
DGX or any other systems which incorporate A100 or H100 integrated circuits and the A100X are also covered by the new license requirement.
The license requirement also includes any future NVIDIA integrated circuit achieving both peak performance and chip-to-chip I/O performance equal to or greater than thresholds that are roughly equivalent to the A100, as well as any system that includes those circuits. A license is required to export technology to support or develop covered products.
The USG indicated that the new license requirement 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 and Russia. The Company does not sell products to customers in Russia.
I should point out that the NVIDIA A100 was launched two years ago – on June 22, 2020, while the AMD Instinct MI250 was introduced on November 8, 2021.
So it appears that the US government wants to maintain at least a 1-year advantage in high-performance AI chips.
AMD, NVIDIA Set To Lose Billions From AI Chip Sales To China!
Both AMD and NVIDIA stopped selling chips to Russia, after the invasion of Ukraine, so there is no material loss from such a ban on sales to Russia.
However, they both stand to lose billions of dollars worth of sales to China. NVIDIA alone estimates that the ban will affect US$400 million of sales, just in the third fiscal quarter.
Even more worrying was the likelihood that this ban may delay the H100 chip’s launch, and force NVIDIA to move “certain operations” out of China.
The new license requirement may impact the Company’s ability to complete its development of H100 in a timely manner or support existing customers of A100 and may require the Company to transition certain operations out of China.
AMD however claims that the ban will not have a material impact on its business, because shipments of its less powerful MI100 chips are not affected.
At this time, we do not believe that shipments of MI100 integrated circuits are impacted by the new requirements.
We do not currently believe it is a material impact on our business.
Both AMD and NVIDIA will now have to discuss with their customers in China on using alternative (less powerful) chips, or obtaining special licenses from the US government.
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