It would appear that NVIDIA in a desperate attempt at maximizing profits have been playing a game of cat and mouse with the United States government which seemingly might come back to bite CEO, Jensen Huang where the sun doesn’t shine.
In a recent interview with Fortune, U.S. Commerce Secretary Gina Raimondo issued a warning to NVIDIA. She cautioned that any new product redesign of a previously restricted graphics chip would quickly face additional restrictions.
Besides government funding, Raimondo has also raised concerns about the stance American companies take regarding the prioritization of U.S. national security over business interests.
She suggests that companies like NVIDIA and Intel may experience a decline in revenue but should firmly align themselves with America. The official’s statement indicates that the U.S. government has thrown its full support behind hindering the advancement of Chinese markets and countering their expanding influence.
Although Raimondo did not explicitly specify the particular product(s) in question, though it would be safe to assume that this threat culminates regarding NVIDIA’s recently announced HGX H20, L20 and L2 graphics cards alongside the potentiality of a slightly downgrade in the form of the GeForce RTX 4090 D(ragon) of which Chinese AIB vendors were preparing to introduce by erasing the existence of the RTX 4090 from their product listings.
Previously, NVIDIA’s data-center solutions such as the H100 and A100 were all banned for exportation to China amongst countless other countries by these imposed restrictions of these crucial artificial intelligence chips. These GPUs are lucrative for the company amid the ongoing growth of the AI sector.
The Chinese region which as you would expect seemingly has large orders with NVIDIA that CEO, Jensen Huang wishes to be fulfilled by any means necessary. In response, NVIDIA introduced the H20, L20, and L2, designed to comply with the restrictions by reducing compute capabilities specifically for the Chinese market.
However, these efforts faced challenges as restrictions expanded, leading to the H800 being barred from exportation, along with the GeForce RTX 4090.
The H800 was also a quick effort in circumventing sanctions against the A100 GPU, only for the restrictions to expand further resulting in the H800 being barred from exportation alongside the GeForce RTX 4090.
Which is why NVIDIA have been planning to introduce a special RTX 4090 “D” variant, exclusive to China which more than likely was intended to be a more gimped AD102 rendition with inferior compute ability and gaming performance, however on the plus side Chinese consumers would be able to purchase this inferior “4090 D” for the intended MSRP of ¥13,000 RMB (1600 USD) that the previous RTX 4090 was available at.
But then again, if you play stupid games you’ll undoubtedly win stupid prizes. NVIDIA CEO, Jensen Huang has been on a knifes edge when it comes to spontaneously spawning new SKUs intended to circumvent these trade restrictions specifically catering to the Chinese market.
Though given how all three of these units, and most certainly including the GeForce RTX 4090 D all fall under the 4800 TPP (Total Processing Performance) threshold that was recently imposed, which would otherwise lean towards that the US authorities would have to swiftly enact a more severe restriction or bend their own rules a little.
Given the nature of the current Biden administration, a little corruption would be water under the bridge as far as they are concerned.
NVIDIA having only just announced several Chinese AI accelerator products is more than likely going to face additional penalties and scrutiny with the HGX H20 and L20 especially, given they are due for production this month followed by a January tape out with the weaker L2 PCIe GPU, it’s almost a guarantee that these products will also be given a swift execution by the US government if these threats are to be believed.
A threat to severe it needs to be repeated, “If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day“.
This targeted remark was directed at NVIDIA, which is likely to face additional restrictions, casting uncertainty over the fate of Jensen’s formidable “D” as it could potentially be banned. The ongoing struggle between two communist nations over the latest surge in artificial intelligence adds complexity to the situation.
What lies ahead for NVIDIA remains uncertain. Will they proceed with the launch of the RTX 4090 D, fully aware that it’s likely to face an immediate prohibition? It’s a possibility. Equally probable is the continued escalation of this entire ordeal. Imposing bans or sanctions on any product tends to spur an increase in demand, creating a sort of “black market.”
China has had free access to top level NVIDIA GPUs for countless years, but only now is it considered a problem, these restrictions are just going to encourage smuggling of illicit GPUs into the region.
The United States is expressing concern about China’s increasing strength and access to continually advancing silicon despite U.S.-based corporations establishing factories, which, in turn, funnel money directly to the Chinese Communist Party (CCP), they have too many ties to actually distance themselves from China’s grasp and yet pull up a façade regarding the exportation of lucrative graphics hardware to the region.
I’m guessing NVIDIA are just going to have to gimp their products even further if they want to milk as many Chinese customers as possible from here on out.
