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The tensions between the United States and China are not just happening on the shores of Taiwan; they have expanded to the semiconductor industry. Given the significant impact of chips on both countries’ national security, the US administration has imposed sanctions on potential chip deals with China, especially chips with AI capabilities.
While most companies tried not to violate the sanctions, a possible chip deal between NVIDIA and China has prompted the US government to interfere and react. According to PC Gamer (via Fortune), US Commerce Secretary Gina Raimondo threatened that if NVIDIA continues redesigning its AI chips to meet China’s demands, she is going to “control it the very next day.”
The US Commerce Secretary Gina Raimondo blocks Nvidia chip deal with China
Speaking at the Reagan National Defence Forum in California on Saturday, Raimondo said, “We cannot let China get these chips. Period.” She added they want to deny China from accessing the US’s most cutting-edge technology. To do so, Raimondo is asking Congress to allocate more funds to the Commerce Department’s Bureau of Industry and Security. The agency oversees US exports to other countries.
“I have a $200 million budget. That’s like the cost of a few fighter jets. Come on,” Raimondo noted. “If we’re serious, let’s go fund this operation like it needs to be funded.”
Raimondo also addressed American companies, saying they should respect the bans established against particular countries. More importantly, export bans that were imposed on semiconductors. Raimondo added CEOs of chip companies were “a little cranky” with her after imposing export bans because it affected their revenue. However, she said protecting US national security is more important than short-term revenue.
Nvidia is modifying its chips to comply with US export restrictions
Among others, Nvidia is caught redesigning some of its AI chips to be exported to China (via Videocardz). While the Nvidia’s H100/A100 HPC accelerators were subject to restrictions, the chip maker launched modified H800/A800 chips for China. This fall, the Commerce Department updated the semiconductor limitations list to prevent Nvidia’s redesigned chips from being exported to restricted countries. As expected, the chip-making introduced HGX H20, L20, and L2 chips to bypass the ban.
Following the US restrictions on exporting RTX 4090 graphic cards, Nvidia started working on a modified version of it, RTX 4090D. This version is said to be exclusive to China market, and “D” in its name supposedly stands for Dragon. Well, it should not be surprising to soon see RTX 4090D GPU on the US export ban list.
Nvidia and the US government are in the midst of a tug of war. Meanwhile, Chinese companies are reportedly buying US chip-making equipment to produce in-house chips. This will help Chinese to reduce the country’s reliance on imported chips.