With the US government slapping new export restrictions on Nvidia’s AI chips, several Chinese customers are ditching the green team’s offerings for homemade alternatives.
The Wall Street Journal reported that Tencent and Alibaba are cutting orders of Nvidia’s new export-compliant AI chips, as they’re less competitive and also adopting locally made chips like those made by Huawei.
Ditching Nvidia For Homemade Chips
China is one of the biggest customers of Nvidia, earning billions of dollars every year for the green team through it’s chip sales. The Chinese customers also rely heavily on Nvidia’s data centre chips, letting the green team penetrate deeply into the Chinese economy.
Well, leveraging this need, the US government has now come up with export restrictions for critical goods sent to China, as the ongoing trade war retaliation continues. And Nvidia’s AI chips are the most affected by this move. Though Nvidia tried making customized chips for China – that comply with the US restrictions – they aren’t appealing anymore.
As per The Wall Street Journal, several Chinese customers are cutting down on chip orders from Nvidia, citing the newer export-compliant AI chips aren’t as powerful as their US counterparts. Major clients like Alibaba and Tencent have reportedly refused to buy any of NVIDIA’s new AI GPUs(H20 and L20) and are trying the local alternatives instead.
One among them is the Huawei Ascend 910B AI chip, which reportedly received orders of up to 5,000 units already. Though it’s not a big deal yet, it’s undoubtedly an alarming move for Nvidia. Watching how uncertain the US regulations are, the Chinese firms have long started their work on in-house alternatives, and now aiming for a steady course to dominate the AI race.
This aside, the situation isn’t good for Nvidia on it’s home-ground either, as local chip makers like Intel and AMD are preparing their own AI chips, watching how Nvidia is profiting from the AI race. While it’s alarming for Team Green, Intel and AMD are US-based companies, too, making them equally less appealing to Chinese customers.
Other Trending News:- News
