Nvidia Secures Approval to Sell AI Chips in China
By Karen Freifeld, Max A. Cherney and Liam Mo
NEW YORK, March 17 (Reuters) – Nvidia has received approval from Beijing to sell its second-most powerful artificial intelligence chips in China, marking a significant milestone for the U.S. chipmaker. Sources familiar with the matter also revealed that Nvidia is preparing a version of the Groq AI chip that can be marketed in China.
The approval from Beijing allows Nvidia to resume sales of the H200 chips, a move that has been eagerly awaited and comes as a relief for the company. The Chinese market had previously accounted for 13% of Nvidia’s total revenue, highlighting the importance of this development.
Despite strong demand for the H200 chips from both Chinese and U.S. companies, regulatory hurdles in China had been a major barrier to shipments. However, with the recent approval, Nvidia can now fulfill pending orders and resume production of the chip.
Nvidia CEO Jensen Huang expressed his excitement about the news, stating that the company had been licensed for the H200 by many customers in China and had already received purchase orders from numerous companies. Huang also assured that the supply chain is gearing up to meet the demand for the chip.
The company had faced challenges last year due to regulatory obstacles in both the U.S. and China, leading to a temporary halt in production of the H200 chips. However, with approvals now in place from both countries, Nvidia is poised to capitalize on the growing market demand.
In a recent filing with the U.S. Securities and Exchange Commission, Nvidia disclosed that it had received a license in February that would allow the sale of “small amounts of H200 products to specific China-based customers.” This development underscores the company’s commitment to meeting the needs of its Chinese clientele.
Nvidia’s expansion into the Chinese market also includes plans to introduce a version of the Groq AI chip tailored for China. The chip is expected to be available in May and will be utilized for inference tasks, complementing Nvidia’s existing lineup of AI chips.
While Nvidia is a dominant player in training AI systems, the company faces stiff competition in the inference market from Chinese firms like Baidu, which already produce their own inference chips. Nevertheless, Nvidia remains optimistic about the potential of its AI offerings in China and is poised to capitalize on the growing market opportunities.
In conclusion, Nvidia’s approval to sell AI chips in China marks a significant milestone for the company and opens up new avenues for growth in one of its key markets. With the regulatory hurdles now behind them, Nvidia is well-positioned to capitalize on the increasing demand for AI technologies in China.
(Reporting by Karen Freifeld, Stephen Nellis, Max A. Cherney and Liam Mo; Editing by Chris Sanders, Miyoung Kim and Kevin Buckland)
