NVIDIA H200 AI GPU Faces Potential Ban in China, Unrelated to US Regulations

NVIDIA’s H20 AI accelerator, a top seller in the market, may face a ban on sales in China, potentially leading to a significant revenue decline for the company. Recent energy efficiency regulations imposed by Beijing are set to complicate NVIDIA’s operations in a crucial market.

Potential Revenue Loss: Up to $20 Billion for NVIDIA

The journey of NVIDIA in China, particularly in the AI sector, has been tumultuous due to ongoing geopolitical tensions that have introduced various shipping restrictions. While many of these limitations have emerged from U. S.policies, recent reports suggest that China’s own measures could further tighten the landscape. According to The Financial Times, the Chinese government is contemplating new curbs on AI chips aimed at diminishing NVIDIA’s dominance and promoting domestic alternatives.

The National Development and Reform Commission (NDRC) of China is reportedly preparing to implement regulations targeting AI chips and data centers used by local enterprises. One potential action includes enforcing “energy efficiency”standards, which could result in a complete ban on the sale of NVIDIA’s H20 AI accelerator in the country. As a significant portion of NVIDIA’s AI sales derives from China, this development poses a substantial threat to the company’s financial performance.

NVIDIA To Generate A Whopping $12 Billion From China Despite Restrictions As H20 AI GPU Sees Massive Demand 1

In response to the NDRC’s impending guidelines, NVIDIA appears to be proactive, having already initiated discussions with Zheng Shanjie, the commission chair. The company is also considering reducing the performance of the H20 AI accelerator to align with the new regulations. However, this adjustment might not be straightforward. Decreased performance could render alternative products from competitors more attractive to consumers.

Currently, NVIDIA’s primary competition in the Chinese market comes from Huawei, a fact acknowledged by CEO Jensen Huang. Huawei is preparing to unveil its next-generation Ascend 910C chip, which is expected to rival the performance of NVIDIA’s H100, leveraging SMIC’s advanced 7nm technology among other enhancements.

With NVIDIA now generating approximately $20 billion in year-over-year revenue from the Chinese market, a sizable share of this is attributable to the H20 AI accelerator. Given the looming restrictions, it is crucial for NVIDIA to identify new strategies swiftly to adapt to these changes.

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