US Officials Order Nvidia To Halt Sales of Top AI Chips To China

Chip designer Nvidia on Wednesday said that U.S. officials told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple Chinese firms' ability to carry out advanced work like image recognition and hamper a business Nvidia expects to generate $400 million in sales this quarter. Reuters reports: Nvidia shares fell 4% after hours. The company said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with completion of developing the H100, the flagship chip Nvidia announced this year. Nvidia said U.S. officials told it the new rule "will address the risk that the covered products may be used in, or diverted to, a "military end use" or "military end user" in China." The announcement signals a major escalation of the U.S. crackdown on China's technological capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured. [...] Nvidia said it had booked $400 million in sales of the affected chips this quarter to China that could be lost if Chinese firms decide not to buy alternative Nvidia products. It said it plans to apply for exemptions to the rule but has "no assurances" that U.S. officials will grant them. Stacy Rasgon, a financial analyst with Bernstein, said the disclosure signaled that about 10% of Nvidia's data center sales, which investors have closely monitored in recent years, were coming from China and that the hit to sales was likely "manageable" for Nvidia.

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