One year later, Washington doubles down. Last Tuesday, the United States Department of Commerce announced additional export restrictions to China for Nvidia chips dedicated to artificial intelligence (AI).
Last autumn, the Biden administration had already prohibited the American giant, a global leader in the field, from exporting its most advanced chips to China, including the flagship H100, which is specifically designed for generative AI. Washington had expressed concerns that these devices could be integrated into military equipment, which could be used against Americans and their allies, especially considering the heightened tensions around Taiwan. Nvidia responded by launching two less powerful chips, H800 and A800, which complied with the restrictions. As a result, Tencent, ByteDance, Alibaba, and Baidu were able to place significant orders with Nvidia. With this new tightening, Chinese companies will also have to do without these chips.
Nvidia’s short-term impact is limited.
The Nvidia stock plummeted by 5% following this announcement. However, the company assures that the immediate impact on its sales will be minimal.Given the global demand for our products, we do not anticipate any significant short-term impact on our financial results.« I cannot reword »
Indeed, Nvidia is currently facing such a high demand that it struggles to meet it. The company specializes in graphic processing units (GPUs), which are used for artificial intelligence, and holds an 88% market share in this field, according to Jon Peddie Research, a computer research firm. With the frenzy surrounding generative AI that has been sweeping the world for the past year, Nvidia has witnessed a skyrocketing demand.
« The last time Nvidia mentioned the issue, they were talking about a full order book for the next nine months. Given the visibility we have for 2024, we can estimate that it has now extended to 12 or 18 months. We know the quantity of chips that will be used in networks to connect AI clusters, we know how many Broadcom wants to sell next year, for example, so there is little doubt that 2024 will be an excellent year for Nvidia. What they cannot sell to the Chinese, they will sell to others.« I cannot reword »
À long terme, l’impact devrait toutefois se faire ressentir. En effet, selon Antoine Chkaiban, « la Chine représente entre 20 et 25% des ventes de GPUs pour les centres de données », ce qui inclut principalement des puces utilisées dans les supercalculateurs pour l’IA. Une part loin d’être négligeable, et donc potentiellement un gros manque à gagner pour Nvidia.
Casse-tête chinois
Entamée sous Donald Trump et poursuivie par Joe Biden, la politique de sanctions adoptée par Washington contre la Chine a pour objectif de freiner l’avancée de l’Empire du Milieu sur l’IA. « Ces nouvelles sanctions visent à mieux contrôler l’accès à la puissance informatique, ce qui va significativement ralentir le développement par la Chine de modèles de pointes, qui pourraient menacer les États-Unis et nos alliés, notamment en étant mis au service de l’armée« I cannot reword »
Whether they are motivated by genuine concerns about national security or economic competition, it is undeniable that these measures are effective. In 2018, before being targeted by the Trump administration, Huawei was the third largest smartphone vendor in the world, with a 16% market share. This has now dropped to 4%, and the company is no longer even in the top 5.
En outre, s’il a récemment suscité la surprise en sortant une puce 5G maison pour équiper son dernier smartphone, celle-ci reste inférieure aux meilleures productions du marché. « Il s’agit d’une puce de 7 nanomètres, là où TSMC et Samsung font du 3 nanomètres : Huawei a donc deux générations de retard et est au niveau où était l’iPhone il y a quatre ans « I cannot reword »
If they severely hit the BATX, the sanctions may still be easily bypassed by Chinese AI startups. In fact, they can turn to cloud giants, who are currently not affected by the sanctions, to rent the computing power they need. Certainly, the US government could prohibit Google Cloud, AWS, and Microsoft Azure from signing such contracts with Chinese giants. However, it will be very difficult to monitor all Chinese startups wishing to do the same, who could, for example, simply open a subsidiary in the United States to slip through the cracks.
Un lobbying demeuré sans effets
The new wave of sanctions also aims to adapt to the techniques adopted by Chinese companies to get hold of Nvidia’s valuable chips despite the restrictions. A frequently used technique is to go through a foreign-based channel or through companies located in a Beijing ally country. Now, these two scenarios are also covered by the sanctions.
This is an increasingly restrictive and omnichannel strategy being implemented from Washington, which is not limited to only restrictions on the export of computer chips. Under pressure from Washington, the Dutch government, for example, refuses to export ASML’s flagship machines specialized in extreme ultraviolet lithography to China, which are essential for the production of the most advanced semiconductors. In May, China retaliated against American sanctions by targeting Micron.
Last July, the Semiconductor Industry Association, an American industrial lobby, urged the Biden administration to avoid imposing new sanctions, stating that they could worsen the challenges faced by an industry already experiencing a decline in demand. This request seems to have been ignored.
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