The U.S.On Thursday, chipmaker Nvidia (NVDA.O) launched a modified version of an advanced gaming chip designed to comply with U.S. export controls targeting China. The company says the new chip will offer a “quantum leap in performance, efficiency, and artificial intelligence-driven graphics.” It will be available to Chinese customers starting in January, a Nvidia spokesperson told Reuters.
The GeForce RTX 4090 D. Nvidia’s website lists it as having about 11% fewer processing cores than the chip version sold elsewhere. Nvidia’s China website does not include any other technical details about the product.
China is Nvidia’s biggest market for graphics chips, used in personal computers to render computer-generated images and animation. The country also leads the world in demand for A.I. processors, which are used to power robots and other technology that can perform tasks such as recognizing faces and understanding speech. The two industries have driven Nvidia’s growth, helping the company become the first publicly traded semiconductor firm to hit a trillion-dollar market value.
But since the Biden administration introduced new rules on chip exports to China in October, Nvidia has had to adjust its products for the market. Its two highest-end artificial intelligence chips and its leading gaming chip were blocked for sale in China, forcing the company to redesign them.
Nvidia’s new chips will have fewer processing subunits, which will help accelerate artificial intelligence workloads. That means that compared with Nvidia’s flagship A100 chip, the new China model will be about 50% less potent in those applications. That will limit its use for applications such as generating photos or videos, which require high computing power to determine how the model should look.
Those limitations are likely to create an opening for domestic chipmakers such as Huawei Technologies, which has grabbed around a 90% share of China’s $7 billion A.I. chip market. In a sign of the potential market shift, sources say China’s Baidu Internet has placed a sizeable order for Huawei A.I. chips. The internet giant moved before the new U.S. export restrictions were announced, anticipating that it would no longer be able to purchase from Nvidia.
The U.S. government has imposed export limits on chips deemed critical for military or other national security purposes. Nvidia has avoided some restrictions by selling its products in other countries that are not subject to export controls, such as Japan and South Korea. It has also been able to develop its chips with lower computing capabilities that are still suitable for A.I. applications.
However, it may need help to keep up with the demand for its most capable chips, which are in high demand from many businesses for use in autonomous cars, robots, and other technology that require large amounts of computing power. As a result, Nvidia may face a supply crunch shortly.
