U.S. discusses AI Chip sales to China with Nvidia, says Raimondo

The U.S. government is currently in talks with NVIDIA (NVDA) regarding the conditions under which it can sell AI chips to China. The administration has made it clear that Nvidia (NASDAQ:) is not allowed to export its most sophisticated semiconductors to Chinese companies.

In a recent interview, U.S. Commerce Secretary Gina Raimondo stated that Nvidia has permission and is expected to sell AI chips to China, as most of these chips are intended for commercial use. However, she emphasized that the export of the most advanced AI chips, which have the highest processing capabilities and could be used by China for developing cutting-edge models, is prohibited.

Raimondo mentioned her conversation with Nvidia’s CEO, Jensen Huang, where he expressed his company’s commitment to compliance. He sought clear guidelines, indicating Nvidia’s willingness to cooperate and avoid rule violations.

Nvidia has not publicly commented on this matter. However, CEO Huang previously noted that Nvidia is collaborating with the U.S. government to ensure that its new chips for the Chinese market adhere to export restrictions.

Nvidia, a leading AI chip designer based in California, dominates China’s AI chip market with over 90% share. However, recent U.S. export restrictions are expected to open doors for Chinese competitors.

Reuters reported last month that Nvidia had informed its Chinese customers of a delay in launching a new AI chip tailored for China, pushing the release to the next year’s first quarter. In the wake of the new U.S. rules, Nvidia forecasted a significant decline in its sales in China for the fourth quarter, as mentioned in its November earnings report.