New Export Curbs On Nvidia And AMD Chips Will Be Minimal But Could Pose Longer Term Challenges

• The U.S. expanded the restriction of exports of Nvidia and Advanced Micro Devices artificial-intelligence chips beyond China to other countries including in the Middle East.
• The curbs will affect Nvidia’s A100 and H100 chips designed to speed up machine-learning tasks,
• Nvidia said the curbs would not have an "immediate material impact" on its results.

Export Restrictions On Nvidia And AMD

‘’For now, these latest restrictions are set to at most be a brief glancing blow for the King of AI, Nvidia (NASDAQ:NVDA) and its rival AMD (NASDAQ:AMD). Such is the insatiable demand for their complex AI chips around the world to power the machine learning revolution, they are not going to be short of customers. There are concerns that the companies won’t be able to keep up with the current clamour for orders due to supply constraints of key components.

Demand has been far outpacing supply for Nvidia’s H100 chip, which is subject to these latest restrictions, and it’s been selling for double its original price.  Being ahead of the curve of a megatrend is a rare opportunity and Nvidia in particular has a front seat on the AI juggernaut. Companies don’t want to be left behind in the AI revolution, and even though times are tighter, they are ringfencing budgets to invest in future AI capabilities.

But there is the potential for others to catch up and gain a bigger slice of the market. So, over the longer term, if these restrictions stay in force, they could open the door to an easier run for other start-ups with eyes on the AI prize. Already the ban on the sale of some of Nvidia and AMD’s chips in China appears to have helped propel progress for new domestic chip developers, particularly Shanghai Biren Intelligent Technology Co which is focusing on selling its BR100 chip to private data centre and cloud customers.

Whether it can build an eco-system with a software platform to get anywhere close to rivalling Nvidia is far from clear but as we’ve seen there has been huge leaps in AI development in a short space of time, so the incumbents don’t have room to be complacent.’’

Article by Susannah Streeter, head of money and markets, Hargreaves Lansdown

Source valuewalk