Nvidia cautioned of a "long-term detriment" should extra American export controls on its semiconductors to China be implemented. Prior reports had indicated that the U.S. was contemplating new export limits on AI-connected chips, which are similar to the type Nvidia manufactures. Despite the looming geopolitical uncertainty, Nvidia's stock has surged by over 220% in 2020, and the corporation is predicting revenue growth to triple in the September quarter.
Nvidia cautioned that further export limits on its chips to China would lead to "permanent loss" for American semiconductor firms to be at the forefront in one of the biggest markets in the world. Reports in the past few months have indicated that the United States may impose new export controls on certain chips for artificial intelligence - such as the ones that Nvidia produces. After rules were established last year that prevented Nvidia from selling its top-end A100 and H100 graphics processing units to China, its Chief Financial Officer Colette Kress declared on an earnings call that the current regulations are sufficient. She added that if more export limits are enforced, it may not have a considerable short-term effect on their finances, but "over the long term, restrictions prohibiting the sale of our data center GPUs to China, if implemented, will result in a permanent loss of an opportunity for the U.S. industry to compete and lead in one of the world's largest markets."
Nvidia previously rolled out A800 and H800 chips, which are modified and toned-down hardware, in order to comply with US export regulations.Kress made a similar statement in June, implying that American semiconductor businesses could suffer impacts from further export limitations.This emphasizes the firm's resistance to any additional limitations in one of its most important markets, China, which is responsible for 20-25% of Nvidia's revenue in its data center unit, its largest area. This section of the business saw a record-breaking growth of 171% from the June quarter, with the company’s overall performance greatly surpassing anticipations.The U.S. says the export restrictions are meant to keep Chinese access to technological resources with potential for military uses away from the country. This has been a key dispute between the two global powers for the past few years, with semiconductor parts particularly affected.Compared to its competition, Nvidia’s chips, used in data centers to run large AI models such as those behind ChatGPT, are said to be superior. Chinese organizations also utilize these chips to train large datasets.Notwithstanding the political implications, Nvidia’s stocks have still jumped more than 220% this year, and the company anticipates revenue growth to triple year-over-year during the September quarter.
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