USA vs China AI race: Why are Nvidia and its chips becoming trump card?

AI race between the US and China are getting more intense and artificial intelligence giant Nvidia has become a cynosure of all eyes. The stringent measures by the White House in recent years have prevented the California-based firm from selling certain AI chips -- widely regarded as the most advanced in the world -- to China.

Nvidia was planning to build a research and development centre in Shanghai, the Financial Times reported on Friday, as tighter export restrictions imposed by Washington threaten sales in the key Chinese market.

However, the major bone of contention remains the Hopper H20 chip. CEO of the US Chipmaker Jensen Huang said on Saturday said that Nvidia was evaluating how to address the China market after the U.S. government placed limits on sales of its Hopper H20 chip there but will not put out another version from the Hopper series, CEO Jensen Huang said on Saturday.


Asked what their next chip for China after the H20 was, he said: "It's not Hopper because it's not possible to modify Hopper anymore," Huang said, according to a livestream posted by Taiwan's Formosa TV News network.

Huang, who has consistently said China is critical to Nvidia's growth, made a visit to China immediately after the U.S. placed new restrictions on China-bound shipments of its H20 chips, the only AI chip the company can sell legally in China. China generated $17 billion in revenue for Nvidia in the fiscal year ending January 26, accounting for 13 per cent of the company's total sales.

Reuters reported earlier this month that Nvidia plans to release a downgraded version of the H20 chip for China in the next two months, as it seeks to prop up sales in the country, where it has lost market share to domestic rivals such as Huawei.

The U.S. Framework for Artificial Intelligence Diffusion, issued in January just a week before the end of former President Joe Biden’s administration, aimed to limit AI chip exports to most countries.

Huang also said that previous AI export regulations were wrong and should have been focused on maximising U.S. technology globally.

Trump has said he will cancel the AI diffusion rules that were introduced by the Biden administration.

FAQs

Q1. What is full form of AI?
A1. The full form of AI is artificial intelligence.

Q2. Which is the most controversial chip?
A2. Hopper H20 chip.