US tech giant Nvidia Corp. has revealed that it will soon restart selling its H20 AI chips in China. These chips are high-end and are critical to AI development. According to Nvidia, the American government gave the company assurance that the U.S. would provide the needed licenses to enable the firm to resume AI chip sales in the Asian country.
This announcement marks a reversal from a ban that was imposed by the U.S. federal government restricting the tech firm from selling its H20 chips to companies in China. The ban was issued in April on concerns that the technology could be used by the Chinese military to develop advanced weapons systems that could threaten America.
AI chips have been the target of export controls instituted by the Trump administration in efforts aimed at ensuring that China doesn’t outcompete the U.S. in the race to dominate AI globally.
It should be noted that these H20 chips had been specifically developed to address the needs of buyers in China after previous advanced chips from the company were banned from being exported to China. The H20 chip was designed to have lower specifications than the specifications of other chips listed in the previous ban.
In May, Beijing and Washington agreed to temporarily suspend their tariff war as a more permanent agreement is hashed out before August 12.
Consequently, China agreed to lift the export restrictions it had imposed on rare earths and in return, America undertook to halt its export restrictions on software used to design AI chips. Chinese firms can now access this technology.
For long, Nvidia has regarded China as a key market for its products. Jensen Huang, the company’s CEO, has lobbied both the U.S. and China for several months so that H20 sales can resume. These chips, specifically designed for the Chinese market, risked having their production halted since the target market had been rendered inaccessible by the trade war.
Huang is in China at the moment and has held discussions with officials of Chinese companies on the ways in which artificial intelligence can boost productivity and how the technology can be developed safely.
Last week, the American tech giant reached the milestone of being the first company ever around the globe to reach a market valuation of 4 trillion dollars. The announcement that H20 chip sales could resume in China gives Nvidia an opportunity to build on its success and consolidate its leadership in the market for advanced AI chips.
It remains to be seen how other American tech giants like Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG) could benefit from the easing trade tensions between China and the U.S.
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