NVIDIA collaborates with US Govt to make low-grade AI Chips for the Chinese market

In an announcement on Wednesday, NVIDIA’s CEO, Jensen Huang, revealed the company’s close collaboration with the US government to ensure that its new chips intended for the Chinese market adhere to export restrictions.

The California-based AI chip designer has held a dominant position, capturing over 90 per cent of China’s $7 billion AI chip market. However, recent US curbs on chip exports are expected to open avenues for Chinese competitors.

Earlier reports from Reuters indicated that NVIDIA had informed its Chinese customers of a delay in launching a new AI chip focused on the Chinese market, now slated for the first quarter of the coming year.

While Huang did not confirm the Reuters article, he emphasized NVIDIA’s concerted efforts to align its products with US regulations during a press conference in Singapore.

Huang stated, “NVIDIA has been working very closely with the US government to create products that comply with its regulations. Our plan now is to continue to work with the government to come up with a new set of products that comply with the new regulations that have certain limits.”

He acknowledged the need for market input in this process and acknowledged Huawei as a formidable competitor.

NVIDIA had previously warned of a substantial decline in fourth-quarter sales in China following the implementation of the new US rules.

Huang noted that while China traditionally contributed around 20 per cent of NVIDIA’s revenue, predicting the impact of the new US export restrictions on this percentage remained challenging.

In a separate development, Huang revealed ongoing discussions with Singapore regarding potential significant investments. NVIDIA is also exploring collaboration with the city-state to contribute to the development of its large language model, Sealion.

Singapore’s Infocomm Media Development Authority (IMDA) recently announced a S$70 million ($52 million) initiative to create Southeast Asia’s first large language model. Huang highlighted Singapore’s vibrant AI ecosystem and its role as a major data centre for various Asian markets.

(With inputs from agencies)