Nvidia, AMD to gain market share in China as US eases export restrictions - SCMP

Nvidia, AMD to gain market share in China as US eases export restrictions - SCMP

Nvidia Corp. and Advanced Micro Devices Inc. (AMD) have been granted approval to resume sales of certain AI chips in China, marking a significant reversal in US export policies. This move, facilitated by assurances from Washington, will allow Nvidia to restore its ability to fulfill orders previously lost due to government restrictions. The H20 artificial intelligence accelerator, designed to comply with earlier China trade curbs, is expected to add billions to Nvidia's revenue this year [1].

The US government has provided licenses for the H20 chip, a less-advanced model, and AMD has received similar assurances for its MI308 chips. Shares of AMD jumped as much as 8.5% and Nvidia rose as much as 5% following the announcement [1]. This development is seen as a positive sign for the AI semiconductor supply chain and Chinese tech platforms seeking Nvidia hardware for AI services [1].

The US first restricted Nvidia’s China sales in 2022, aiming to prevent Beijing from accessing advanced AI that could benefit its military. However, these restrictions disrupted supply chains for major Chinese tech firms relying on Nvidia's GPUs [2]. The recent policy shift reflects a thawing of relations between Washington and Beijing, guided by an opaque trade truce [1].

The approval of Nvidia’s H20 chips comes after weeks of negotiations, with the Biden administration softening its stance following industry lobbying. Nvidia's CEO, Jensen Huang, met with former President Donald Trump, who backed a policy of greater exports where national security was not compromised [1]. The US Commerce Department granted Nvidia limited approval to sell modified AI chips to Chinese customers, which have reduced computing power but meet commercial AI needs [1].

The resumption of chip sales is expected to benefit companies like Alibaba Group Holding Ltd. and DeepSeek, which rely on Nvidia hardware for AI services. This move also reflects the importance of the China market for Nvidia, which has seen a significant rise in market value due to its role in AI infrastructure [1].

References:
[1] https://finance.yahoo.com/news/nvidia-resume-h20-ai-chip-064336947.html
[2] https://colitco.com/nvidia-resumes-ai-chip-sales-china-nvda-stock/