Nvidia Unveils Slowed Down Chip for China Market

Facts

• Nvidia on Thursday released a new, adjusted version of an advanced gaming chip in order to meet US export regulations aimed at China. The US-based chip-making giant will begin selling its revised chip in China starting in January.¹
• Nvidia unveiled the GeForce RTX 4090 D graphics card — which is a less powerful version of its leading RTX 4090 — on its website. The Chinese version has fewer CUDA cores than the standard model, topping out at 14,592 compared to 16,384.²
• Nvidia had to create a revised chip for the Chinese market after the Biden administration imposed regulations in October that placed export restrictions on certain advanced artificial intelligence (AI) chips sent to China. The new chip is 5.9% slower than its predecessor.³
• A Nvidia spokesperson said that the company “extensively engaged with the US government” while developing the RTX 4090 D. In addition to the RTX 4090, the Biden regulation also blocked two China-specific AI chips, the A800 and H800.⁴
• The spokesperson hailed the chip as a “quantum leap in performance, efficiency and artificial intelligence-driven graphics.” It will cost 12,999 Chinese yuan ($1,842).⁵
• China is one of Nvidia’s largest markets, and the company comprises more than 90% of China’s $7B AI chip market. Meanwhile, Cointelegraph reported in September that China plans to build AI chip factories to cement its position as a global leader.⁵

Sources: ¹REUTERS, ²Verge, ³Investopedia, ⁴MarketScreener and ⁵Cointelegraph.

Narratives

• Anti-China narrative, as provided by Foreign Affairs. Thanks to the Biden administration’s tough approach to China, Nvidia has created a less powerful version of its standard AI chip, helping to contain Beijing's worrisome growth in the chip sector. The US doesn't seek to stifle innovation and harm international trade, but it cannot let a domestic company provide the highest level of technology to a tyrannical adversary. Nvidia showed that it is possible to comply with regulations while not cutting off an entire market.
• Pro-China narrative, as provided by National Herald. The US may think it scored a massive victory over China with its ban on certain AI chip exports, but that's sheer naivety. First of all, Nvidia is still selling the same essential product to China, as it barely reduced certain aspects to make the chips slightly less efficient. More importantly, Washington's policy will only push China into creating its own chip manufacturing plants and becoming the global leader in the industry. China’s vast stockpile of semiconductors and other technology makes its rise inevitable.

Predictions