Nvidia May Have a Strategy to Dodge US Export Restrictions on AI Chips

Nvidia is reportedly planning to change the design of its artificial intelligence (AI) chips to avoid US export restrictions. According to reports, the chipmaker has informed some of its largest Chinese customers, including Alibaba Group, ByteDance, the parent company of TikTok, and Tencent Holdings. Nvidia CEO Jensen Huang informed customers of his plans while in Beijing.

Huang traveled to Beijing in mid-April, just days after the US government tightened restrictions on the export of advanced AI chips to China.

What the US export rules state

The most recent rules targeted Nvidia's H20 chip, the company's main product designed specifically to meet previous US regulatory requirements.

Even chips previously cleared for sale in China, such as the H20, are now restricted under the new regulations because they still provide computing power that is deemed too advanced.The US government has stated that the measures are intended to prevent China's military from accessing cutting-edge AI technology.

What Nvidia says

Nvidia had warned that the new export controls would have a significant impact on its business, with revenue expected to fall by $5.5 billion. Despite these setbacks, Nvidia continues to look for ways to maintain its presence in the Chinese market while adhering to regulatory guidelines.

According to The Information, Nvidia has informed customers that a sample of the new chip will be available as soon as June.The company is also developing a China-specific version of its latest-generation AI chip, Blackwell.