The United States wants to stop China’s push in its tracks and finish hitting Russia. The restrictions it imposes on its technology are impressive and we have seen them, but a new twist is going to affect the progress of these two countries to a greater or lesser extent, because neither Intel, AMD nor NVIDIA will be able to sell graphics cards for IA or DL in China or Russia.
Yesterday NVIDIA informed that an official notification from the United States government arrived at its offices about a new licensing requirement that was aimed at graphics cards, but not all of them curiously, at the same time, AMD did the same by announcing its customers in Russia and China the news, while Intel seems to be studying the document and has not commented.
The consequences that the US seeks by vetoing the AI and DL GPUs to China and Russia
The precision with which the US is taking on the Russia issue and China’s push indicates that the game has only just begun. The CHIPS Law It has set the precedent and now it is time to protect the investment that is going to be made in all areas and above all, with the contracts signed not only on American soil, but also on Taiwanese soil.
So a much more aggressive, and interestingly Trump-like, approach was needed, which the Biden administration has taken with the big three chip design brands. First came the blocking of creation and design software for wafers and in general, for chips that could be created on Chinese or Russian soil.
The Commerce Department briefly explains their approach to what is happening and will happen over the next week:
“While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional necessary actions related to technologies, end uses, and end users to protect the national security of the US. and foreign policy interests.This includes preventing China’s acquisition and use of U.S. technology in the context of its military-civilian fusion program to further its military modernization efforts, committing human rights abuses, and allowing other evil activities”
Very politically correct indeed, what does this really entail? What is being attempted is to abruptly veto the ability to create and design systems, supercomputers and server farms focused on AI and Deep Learning. The entire market goes there for its clear benefits when it comes to designing strategies, data analysis, virtual work environments, as well as new weapons systems.
Therefore, and given the excuse used by the US government, we understand that they want to nip in the bud the development of sixth generation aircraft fleets, ships and aircraft carriers as well as weapons of various kinds. In addition, the future economic structure and its algorithmic predictions are nipped in the bud, as well as advances in medicine and other technological sectors.
No specific chips or architectures are locked, the goal is performance
It’s funny, because there is no specific model of graphics card in the block, everything is going to be based on performance thresholds, apparently based on the A100 current from NVIDIA. Therefore, this will also affect the H100 and of course to options of its rivals such as the AMD MI200 or the new ones Ponte Vecchio from Intel.
Therefore, it is estimated that the economic impact that the already battered companies mentioned will suffer will be quite considerable, since the Chinese market was currently the largest consumer of this type of very specific product. Specifically, it is said that NVIDIA could lose 400 million in quarterly sales.
The only solution would be for the government to grant specific licenses to Russian and Chinese customers by making them sign clauses with commercial restrictions to prevent the resale or transfer of the hardware to third parties, be they companies or individuals.
It is understood that these clients would not be located in China or Russia, but outside those countries, hence the blockage in the conditions of sale, because then they would even enter the black markets for hardware. For this reason, and in order not to lose customers, NVIDIA has been forced to work on diverting purchases from its customers in China to alternative products that alleviate the deficit that the Asian country is going to have, seeking licenses for these.
AMD for its part says the drop in revenue won’t be felt as it sells far fewer AI chips to China. Intel has not made any statements at the moment, but it was a market that it intended to exploit with Ponte Vecchio, so it is a jug of cold water when its graphics cards have not yet been officially presented.