Local Chinese businesses forbidden from purchasing Nvidia's AI-focused semiconductors
In a recent development, Chinese authorities have advised local IT companies to focus on developing their own systems, and to avoid using Nvidia's H20 processors, particularly in projects related to government organs and national security. This advice comes in response to a reported deal between Nvidia and AMD with the administration of US President Donald Trump.
The deal, which has not been officially confirmed, allegedly involves Nvidia and AMD remitting 15% of their revenue from AI chip sales in China to the US government in exchange for licenses to supply their products to China.
It is important to note that this advice does not imply any further penalties or requirements for Nvidia, unlike the penalty imposed on September 15 by Chinese authorities for violating antitrust laws. The specific requirements following the penalty have not been disclosed.
Chinese regulators acknowledged that locally produced processors have reached comparable performance levels to Nvidia chips. This shift in focus on developing local systems is a departure from the message given after the penalty for Nvidia's antitrust violation.
The decision to abandon Nvidia chips was made after the penalty for violating antitrust laws was imposed. Several companies had already begun testing processors in collaboration with Nvidia suppliers, but they have now reported a halt in operations.
The RTX Pro 6000D chips, which were specifically designed by Nvidia for the China market, are not affected by this advice. However, the restrictions affect not only Nvidia's AI chips but also AMD products.
An unnamed executive from one of the IT companies stated that all efforts are now focused on developing their own systems. The ongoing investigation into Nvidia's violation of antitrust laws continues, but it does not appear to be directly related to the advice given by Chinese authorities.
The name of the Chinese government agency that fined Nvidia for violating competition laws is the State Administration for Market Regulation (SAMR). The investigation and the advice from Chinese authorities do not affect the ongoing halt in testing and cancellation of orders for RTX Pro 6000D chips.
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