Nvidia warns tighter AI chip export restrictions to China risk permanent US industry losses

It's not like the end for both them, China will get the chips from black market.
The problem Nvidia has is not being able to sell direct. This means that others will benefit from transactions. And those transactions will be way more that what they get.
Nvidia is afraid to lose the status of the only one that makes the most income from this sales.
We know how they feel about AIB's now and what "leftovers" margins they provide to them. EVGA is the company that left the boat not long ago because of this. EVGA CEO said something like Nvidia didn't consider AIB's have that much to do with RTX/GTX success and that the main R&D is Nvidia. This means that Nvidia will get most of the margins and AIB's whatever they can from selling GPU's.
I just imagine the faces at NV when they found out that someone will "scalp" the AI market instead of them...

Since they're basically saying that "Nvidia IS AI", and if we can't make as much money as we want, the US will suffer, why not just put their beliefs to the test. Why don't they just tell the US gov. to screw off and sell what they want when they want. What are they going to do? According to Nvidia, without them, there is no AI. Besides, as with most companies invested in China....they've already paid for their entrance into the Chinese market by either giving away or having had their IP stolen.

SRB said:

Since they're basically saying that "Nvidia IS AI", and if we can't make as much money as we want, the US will suffer, why not just put their beliefs to the test. Why don't they just tell the US gov. to screw off and sell what they want when they want. What are they going to do? According to Nvidia, without them, there is no AI. Besides, as with most companies invested in China....they've already paid for their entrance into the Chinese market by either giving away or having had their IP stolen.

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If they break the embargo they can't do businesses that adhere to the agreement. That means TSMC won't be able to sell to nVidia and that companies like Google won't be able to purchase nVidia products. Games companies won't able to take their money to implement things like DLSS.


It's a much bigger deal than just selling to China. For example, if Apple did business with nVidia after they did business with China then Apple wouldn't able to sell their products in the US or EU.

On the surface it seems small but there are far reaching effects that are not immediately apparent

takaozo said:

It's not like the end for both them, China will get the chips from black market.
The problem Nvidia has is not being able to sell direct. This means that others will benefit from transactions. And those transactions will be way more that what they get.
Nvidia is afraid to lose the status of the only one that makes the most income from this sales.
We know how they feel about AIB's now and what "leftovers" margins they provide to them. EVGA is the company that left the boat not long ago because of this. EVGA CEO said something like Nvidia didn't consider AIB's have that much to do with RTX/GTX success and that the main R&D is Nvidia. This means that Nvidia will get most of the margins and AIB's whatever they can from selling GPU's.
I just imagine the faces at NV when they found out that someone will "scalp" the AI market instead of them...

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Yes, and about China using US tech - from where ever they got it - there's this interesting story in the news today. https://interestingengineering.com/innovation/chinese-spy-balloon-us-tech

SRB said:

Since they're basically saying that "Nvidia IS AI", and if we can't make as much money as we want, the US will suffer, why not just put their beliefs to the test. Why don't they just tell the US gov. to screw off and sell what they want when they want. What are they going to do? According to Nvidia, without them, there is no AI. Besides, as with most companies invested in China....they've already paid for their entrance into the Chinese market by either giving away or having had their IP stolen.

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IF Nvidia were to do so, there would be some serious consequences from the US. Read up on ITAR

No! Please! Don't force Nvidia into having to go back to making decent GPUs again, gamers won't have them!

None of you have mentioned the potential for this marginally insignificant slight against against Communist China, to turn into WWIII. THE CCP has never relinquished the standpoint that Taiwan belongs to them. The US, "official position" is that there is "one China". (With an extant subtext, stating that, "y'll better leave it the f**k alone).
China is in the process of a massive military buildup, with an emphasis on their navy. Besed on the pretext that the "imperialist US, uses it's carrier strike groups to "project power", (which we do), and wants a much larger piece of that privilege, if not supremacy.

Now Nidia's base chips.come from TSMC, which is, (ostensibly), a "Chinese company". (One China, remember?).However, given TSMC's recent investments in the mainland US, which renders it a "multi-national" corporation. Which collaterally forces the US into a "mutual defense pact" to defend it's (TSMC's) interests. TSMC doesn't even have to have its US fabs up and running yet to be regarded in that way.

Now, of late China has been extremely provocative both in air and sea operations in the international waters of the south China sea. You have to wonder when "road rage" will set in, and the US might take some active retaliatory measures against these actions.,

So, the bottom line is, "how do you truly stop, "China from selling Chinese goods to a Chinese company", without some form of escalation as a consequence?

captaincranky said:

None of you have mentioned the potential for this marginally insignificant slight against against Communist China, to turn into WWIII. THE CCP has never relinquished the standpoint that Taiwan belongs to them. The US, "official position" is that there is "one China". (With an extant subtext, stating that, "y'll better leave it the f**k alone).
China is in the process of a massive military buildup, with an emphasis on their navy. Besed on the pretext that the "imperialist US, uses it's carrier strike groups to "project power", (which we do), and wants a much larger piece of that privilege, if not supremacy.

Now Nidia's base chips.come from TSMC, which is, (ostensibly), a "Chinese company". (One China, remember?).However, given TSMC's recent investments in the mainland US, which renders it a "multi-national" corporation. Which collaterally forces the US into a "mutual defense pact" to defend it's (TSMC's) interests. TSMC doesn't even have to have its US fabs up and running yet to be regarded in that way.

Now, of late China has been extremely provocative both in air and sea operations in the international waters of the south China sea. You have to wonder when "road rage" will set in, and the US might take some active retaliatory measures against these actions.,

So, the bottom line is, "how do you truly stop, "China from selling Chinese goods to a Chinese company", without some form of escalation as a consequence?

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China isn't going to start anything serious. Ever since they embraced capitalism they've become just as addicted to US dollars as Wall Street itself. They'll do nothing to directly jeopardize that. As another stated earlier, they'll get their chips by hook or by crook and pay through the nose for them. If the US is smart it'll have its spooks embedded in that black market funneling plenty of defective silicon to China.

psycros said:

China isn't going to start anything serious. Ever since they embraced capitalism they've become just as addicted to US dollars as Wall Street itself. They'll do nothing to directly jeopardize that. As another stated earlier, they'll get their chips by hook or by crook and pay through the nose for them. If the US is smart it'll have its spooks embedded in that black market funneling plenty of defective silicon to China.

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Keep in mind that China has crippled American manufacturing capability to an (arguably) fairly extensive degree in the process.

How much would you rather pay someone to build you a new aircraft carrier? Maybe something on the order of $4.00 an hour to a Chinese worker, or possibly as much as $40.00 an hour for good old union affiliated US worker..

Your viewpoint only addresses the economic front. It completely ignores the other entities with skin in the game. Such as the military establishment, the state department, the ideologues, and so forth. Each of which can have a dramatic effect on the action of another.

Economic "dependency", is only being reinforced by the greed of the American consumer.. And not, I might add, to the US' benefit.

Can you say "conquistadors"

Historical data suggest that for most of the 20th century, from 1900 through the 1960s, at least 90% of Latin America's population was Catholic (See History of Religious Change). Today, the Pew Research survey shows, 69% of adults across the region identify as Catholic.

Can you say, "USSR"? The USSR ran out of money, and then collapsed.

But in the case of US / China economic interdependence, (by your own words), we're actually funding the CCP's expansionist policies.

Do you remember Hong Kong being returned to China, and how long its "self governance" lasted thereafter?

So you remember Teinanmen Square?

IMO, it would not be in our best interest to brush off the CCP so lightly.

It's very ironic that US is claiming that they want to fix their deteriorating relationship with China, and continue on the path to sanction them. Does that even make sense? Any sane person tried fixing a broken relationship this way? And to be honest, I feel it is not just Nvidia that is unhappy that they are losing revenue due to political reasons. At some point, these big organisations may reject these sanctions because their bottom line is taking a significantly hit.