Latest news with #A800
Engadget
a day ago
- Business
- Engadget
NVIDIA may give US government a cut of its profits to sell AI chips to China
The debate over whether AI chipmakers should be allowed to sell their products to China has taken an unusual turn. The US government has reportedly given NVIDIA and Advanced Micro Devices (AMD) permission to make the sales but for one big catch: 15 percent of the sales. The news was first reported by The Financial Times , which cited multiple people familiar with the agreement. In July, NVIDIA announced that the US government would approve export licenses to sell its H20 AI GPUs after blocking their sale in April. NVIDIA created these specific chips — which are less powerful than ones sold in the US — in response to restrictions on sales to China. It previously developed the A800 and H800 chips for the Chinese market, but those were also banned. Now, NVIDIA and AMP were both reportedly granted export licenses for China last week, after agreeing to give the government 15 percent of their profits. AMP will provide the share from sales of its MI308 chip. There's significant debate over whether selling AI chips to China will endanger US national security. At the end of July, 20 national security experts and past government officials — including President Trump's former deputy national security advisor, Matt Pottinger — wrote a letter to Howard Lutnick, the US Secretary of Commerce, stating as much. The signatories "believe this move represents a strategic misstep that endangers the United States' economic and military edge in artificial intelligence." They worry it will restrict the number of chips available for the US and be used by China's military, among other concerns. NVIDIA disagrees, claiming the export licenses will allow it to compete with Chinese businesses.
The Hill
a day ago
- Business
- The Hill
Nvidia walks tightrope on US-China tensions
Nvidia is navigating an increasingly tenuous relationship between the U.S. and China, as the company seeks to sell its artificial intelligence (AI) chips to both countries while they engage in a high-stakes race to dominate the technology. The chipmaker, whose graphics processing units (GPUs) are considered the backbone of the AI boom, has seen a meteoric rise over the past few years, becoming the most valuable company in the world and the first to cross the $4 trillion threshold. However, as the U.S. and China compete for control, its chips have become a key target, creating a complex balancing act for the firm. 'They're doing a spectacular job of walking that tightrope right now,' said Stacy Rasgon, a senior analyst at Bernstein Research. 'I hope they can stay up on the rope,' he added. 'Jensen's been doing a really good job of balancing what are some fairly opposing concerns from both sides. He's been doing a good job of walking that line.' Nvidia's chips have become highly sought after, as companies and countries alike race to develop AI. This has also made the chips a key chokepoint, as the U.S. seeks to limit China's abilities to develop the technology. 'The entire chip industry has been having to learn how to reengage with Washington after a couple of decades in which the products they sold weren't seen as particularly politically sensitive. Over the past decade, that's changed dramatically,' said Chris Miller, an international history professor at Tufts University. While Nvidia isn't the only chipmaker facing restrictions, it sits in a unique position as the dominant market player. 'Nvidia's the one that's supplying the bulk of the merchant AI infrastructure that everything's running on. Clearly, it's imperative everywhere and probably doubly so in China,' Rasgon said. 'To the extent that China's been building out their AI infrastructure, largely they've been building it out or desiring to build it out on Nvidia.' In a statement to The Hill, a Nvidia spokesperson said, 'Trying to cobble together datacenters from smuggled products is a nonstarter, both technically and economically. Datacenters are massive and complex systems, making smuggling extremely difficult and risky, and we do not provide any support or repairs for restricted products.' 'Rather than risk using smuggled products, the market will turn to widely available competitors such as Huawei, undercutting U.S. leadership in China and worldwide,' the spokesperson said. The Biden administration initially limited some advanced chip sales to China in October 2022, prompting Nvidia to develop separate chips with slower processing speeds for sale on the Chinese market. However, the A800 and H800, alternatives to its A100 and H100 chips, were soon targeted in another round of export controls in October 2023. In response, Nvidia developed a new option for China, the H20 chip. The Trump administration initially cracked down on H20 sales to China in April, as tensions spiked between Washington and Beijing over the president's expansive tariff regime. However, shortly after a visit by Nvidia CEO Jensen Huang to the White House in July, the chipmaker said it had received assurances from the U.S. government that its H20 licenses would be approved. Commerce Secretary Howard Lutnick said the decision was part of a rare earth deal with Beijing, arguing China is only receiving the company's 'fourth best' chip. The controversial move has faced pushback from both Democrats and Republicans, who contend the H20 can still boost China's AI capabilities. The decision represented a key win for Huang, who also received a shoutout from Trump just days later as he unveiled his AI Action Plan. The president reminisced on how he had at one point considered breaking up Nvidia. 'I found out it's not easy in that business. I said, 'Suppose, we put the greatest minds together. They work hand in hand for a couple of years.' He said, 'No, it would take at least 10 years to catch [Huang] if he ran Nvidia totally incompetently from now on,'' Trump said. Nvidia's unique position in the GPU market and the broader AI race gives the company a 'powerful voice' in Washington, Miller noted. 'So long as it's an absolutely central player in AI technology that it's been over the past couple of years, I think it's not surprising that its voice is also heeded and taken seriously by governments as well,' he said. 'It's also not surprising that governments, both the United States and China and others, are trying to shape the market for Nvidia chips and other AI accelerators, given how central they seem to be both for the future of technology but also for prosperity and political power,' he added. Huang has made three trips to China this year to simultaneously manage relations with Beijing amid the shifting export controls in the U.S. He has largely been able to keep the peace so far, albeit with some hiccups. China's Cyberspace Administration reportedly summoned Nvidia last week to explain 'backdoor security risks' with its H20 chips. The chipmaker responded by releasing a blog post Tuesday, saying its chips 'do not and should not have kill switches and backdoors.' Kill switches are built-in mechanisms that would allow companies to remotely deactivate chips. 'Embedding backdoors and kill switches into chips would be a gift to hackers and hostile actors,' David Reber Jr., Nvidia's chief security officer, wrote. 'It would undermine global digital infrastructure and fracture trust in U.S. technology. Established law wisely requires companies to fix vulnerabilities — not create them.' The concerns about backdoors come as some American lawmakers have pushed to add location tracking to chips in order to prevent them from ending up in the hands of foreign adversaries. Even with export controls, there has been widespread concern about chip smuggling. The Justice Department on Tuesday accused two Chinese nationals of illegally shipping tens of millions of dollars' worth of chips, including Nvidia H100s, to China. In a letter to lawmakers Thursday, Americans for Responsible Innovation, an AI policy group, called for an investigation into the 'large-scale smuggling' of advanced AI chips into China and whether Nvidia took 'sufficient measures' to prevent or report it. Despite these concerns, Nvidia remains in a fairly strong position with both the U.S. and China. Its situation stands in sharp contrast to that of Intel, which has come under fire in recent days over CEO Lip-Bu Tan's reported ties to China. Sen. Tom Cotton (R-Ark.) pressed Intel earlier this week over Tan's Chinese investments and his previous role as CEO of Cadence Design Systems, which recently pleaded guilty to violating export controls by selling chip design technology to a Chinese military university. On Thursday, Trump called for Tan to resign, suggesting he is 'highly conflicted.' 'It does not appear that Lip-Bu has cultivated that personal relationship with Trump, and maybe that's biting him now,' Rasgon noted. However, there are still factors that could derail Nvidia's careful balancing act. China hawks within the administration could push back on the less restrictive approach toward AI, while Beijing will likely continue to develop its own technology. 'Even if the Chinese can use Nvidia chips, they're probably going to still be putting more effort into local alternatives,' Rasgon added. 'They have no choice, right, because we've shown we have the ability to cut them off at the knees when we want to.'
Perth Now
23-07-2025
- Business
- Perth Now
Australia pays US second $800m for AUKUS amid review
Australia has paid the United States $A800 million in the second instalment under the AUKUS nuclear submarine deal, despite an ongoing formal review of the agreement by US President Donald Trump's administration. Prime Minister Anthony Albanese confirmed the latest instalment on Wednesday, following an initial $A500 million paid in February. In 2023, the United States, Australia and Britain unveiled details of a plan to provide Australia with nuclear-powered attack submarines from the early 2030s to counter China's ambitions in the Indo-Pacific. Australia committed to spend $A368 billion over three decades in its biggest-ever defence deal. Canberra is due to pay the US $A3 billion by the end of the year to support the expansion of American submarine shipyards, Reuters reported in April. "There's a schedule of payments to be made. We have an agreement with the United States as well as with the United Kingdom, it is about increasing their capacity, their industrial capacity," Albanese told national broadcaster ABC. "As part of that as well, we have Australians on the ground, learning those skills." Trump launched a formal review of AUKUS in June to examine whether the pact met his "American First" criteria. It will be led by Elbridge Colby, who in the past has expressed scepticism about AUKUS. Australia, which sees the submarines as critical to its own defence as tensions grow over China's military build-up, has maintained it is confident the pact will proceed. "We support AUKUS," Albanese said. "We have an agreement to a treaty level, with our partners, signed, of course in San Diego with the United States and United Kingdom." Washington will sell several Virginia-class nuclear-powered submarines to Australia, while Britain and Australia will later build a new AUKUS-class submarine.
Yahoo
03-05-2025
- Business
- Yahoo
Nvidia (NVDA) Redesigns Chips to Sidestep U.S. Export Ban, Eyes June China Rollout
Nvidia (NVDA, Financials) is redesigning its AI chips to comply with U.S. export rules while maintaining access to the Chinese market, The Information reported, citing conversations with key clients. Warning! GuruFocus has detected 3 Warning Signs with NVDA. Nvidia has told major Chinese customers including Alibaba Group, ByteDance, and Tencent Holdings that new versions of its AI chips are in development and could be available for sampling in June, the report said. CEO Jensen Huang reportedly outlined the redesign strategy during an April trip to Beijing, following a fresh round of U.S. restrictions targeting AI chip exports to China. The company warned in its previous disclosures that the loss of access to China for its H20 chips could cost up to $5.5 billion in revenue. In response, Nvidia is also working on a China-specific adaptation of its Blackwell-generation AI chips, according to the same report. U.S. regulators have intensified export controls on advanced AI semiconductors in recent months, aiming to limit China's access to cutting-edge computing technology. Nvidia had previously designed downgraded chips such as the A800 and H800 to meet earlier compliance thresholds. The continued pivot highlights Chinas significance as a market for Nvidias AI products and the company's strategy to protect long-term revenue despite geopolitical headwinds. Investors will want to watch for June chip sampling updates and progress on Blackwell's regional customization, as the company tries to navigate tightening U.S.-China tech regulations. See insider trades for NVDA. Explore Peter Lynch chart. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
16-04-2025
- Business
- Yahoo
Nvidia Stock Crashed on Bad News From Washington. Should Investors Buy the Dip?
Nvidia (NASDAQ: NVDA) shares fell more than 7% on Wednesday morning, after the company disclosed new export restrictions on its artificial intelligence (AI) chips. Specifically, the company must now obtain licenses from the U.S. government to sell its H20 processors in China. However, Nvidia doesn't expect those licenses to be forthcoming. The company plans to take a $5.5 billion charge related to "H20 products for inventory, purchase commitments, and related services" in the first quarter of fiscal 2026 (which ends April 27), according to a regulatory filing. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Nvidia stock now has plummeted 30% from the record high it reached in January. Should investors buy the dip? Nvidia has been navigating export restrictions in China for several years. In 2022, the Biden administration prohibited the company from selling its most powerful artificial intelligence (AI) accelerators, A100 and H100 graphics processing units ( GPUs), to Chinese businesses due to concerns about their military applications. Nvidia responded by tweaking its A100 and H100 architectures to build less powerful chips that complied with export requirements. Those processors, called A800 and H800, were adopted by several Chinese technology companies, including Alibaba, Baidu, and Tencent. However, in 2023, the Biden administration restricted the sale of those processors in China. Next, Nvidia developed an even less powerful Hopper GPU called the H20 that complied with latest export curbs, but the Trump administration has now effectively prohibited the sale of those processors in China, too. In total, Bloomberg Intelligence estimates that the latest restrictions will cost the company between $14 billion and $18 billion in revenue in fiscal 2026. While Nvidia has reported exceptional financial results since the generative AI boom began in late 2022, export restrictions have still taken a severe toll. China accounted for over 26% of total revenue in fiscal 2022 but just 13% of total revenue in fiscal 2025. Put differently, total sales increased at 69% annually during that period, but revenue from China increased at just 34% annually. Nvidia announced the H20 export controls on April 15 in a regulatory filing that told investors the licensing requirements will remain effective "for the indefinite future." Several analysts subsequently revised their target prices lower on April 16, as detailed below: Vivek Arya at Bank of America cut his forecast to $160 per share, down from $200. Harsh Kumar at Piper Sandler cut his forecast to $150 per share, down from $175. Srini Pajjuri at Raymond James cut his forecast to $150 per share, down from $170. However, several analysts maintained their target prices despite the latest export controls, including those at Cantor Fitzgerald, Evercore, and Wedbush. Likewise, Joseph Moore at Morgan Stanley reiterated Nvidia as his "top pick" in the semiconductor space. In total, the median target price declined from $175 per share to $170 per share, but that still implies 63% upside from its current share price of $104. Dan Ives at Wedbush urged investors to "look past the chaos." He believes Nvidia is the only chipmaker in the world that can supply the processors required to run the most advanced artificial intelligence applications. He said the financial impact would be "relatively small," but acknowledged the restrications are still a strategic blow for the company. More analysts may lower their forecasts in the coming days, but the average estimate currently calls for Nvidia's earnings to increase 51% in fiscal 2026. That consensus makes the current valuation of 35 times earnings look cheap. Patient investors should consider buying a small position in Nvidia stock now. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $526,499!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $687,684!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 156% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 14, 2025 Bank of America is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Baidu, Bank of America, Nvidia, and Tencent. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy. Nvidia Stock Crashed on Bad News From Washington. Should Investors Buy the Dip? was originally published by The Motley Fool
