Nvidia, the chip giant caught between the US and China

The giant NVIDIA computer has found itself again in the midst of US -Chinese tensions on trade and technology.

On Thursday, the CEO of Nvidia Jensen Huang flew to Beijing to meet senior Chinese officials, after imposing new export controls on its chips.

The California -based company will ask the headquarters of the export of H20 AI to China, a step that the US Department of Commerce said is designed to protect “national and economic security”. Nafidia said that federal officials told them that the condition would be valid for the “unspecified future”.

But why is the company considered very pivotal in the race to excel artificial intelligence between the United States and China?

NVIDIA designs advanced chips, or semiconductors, which are used in obstetric artificial intelligence. Artificial IQ can produce new content of the user router, such as ChatGPT.

In recent years, the demand for artificial intelligence chips has increased until NVIDIA has become one of the most valuable companies in the world. In November, NVIDIA canceled Apple as the largest company in the world by market value.

Since its chips are very essential to developments in obstetric artificial intelligence, successive American administrations have examined NVIDIA’s relationship with China.

Washington hopes that the new controls for export in China’s development of advanced artificial intelligence chips – especially its use by the Chinese army – will slow down the advantage of competing with artificial intelligence with Beijing.

American restrictions on Nvidia sell China chips not new.

In 2022, the Joe Biden Administration imposed separate export controls on the sale of advanced semiconductors to China. NVIDIA is specially designed to comply with these existing restrictions.

The most powerful NVIDIA chip, H100, for sale in China.

However, the appearance of Deepseek, a Chinese company of Chinese artificial intelligence, has prompted new concerns in the United States to the fact that the least powerful chips can lead to major technological breakthroughs.

Deepseek claimed that it can work effectively as other applications such as ChatGPT using less advanced chips.

Now, there is an increasing demand for H20 chips in NVIDIA between Chinese technology companies such as Tincent, Alibaba and Bytedance, the parent company of Tiktok.

These companies have great command orders. But due to the lack of permission to impose new restrictions, NVIDIA expects to be exposed to losses of $ 5.5 billion of these requests that can no longer be fulfilled.

Chime Lee, chief analyst at the Economic Intelligence Unit in Beijing, told BBC that there are alternative AI chips that are developed in China, by companies such as Huawei.

Although he is currently seen as lower than NVIDIA, he told me that American restrictions can push China to focus on developing better chips.

“It will make challenges to the scene of artificial intelligence in China, but it will not significantly slow the development and spread of artificial intelligence in China,” he added.

China is a decisive market for Nvidia. The second largest economy in the world made up 13 % of its total sales last year, although this is still much lower than the United States, which represents nearly half.

The timing of Mr. Houang’s journey is seen as an attempt to support NVIDIA’s business in China despite the latest restrictions.

At his meeting in Beijing with Ren Hongvin, Chairman of the Chinese Council for the Promotion of International Trade, Jensen Huang said he hoped to “continue to cooperate with China,” according to CCTV.

On Thursday, the Financial Times reported that Huang’s trip to China also included a meeting with the founder of Depsic, Liang Winfing.

Separately, senior Chinese officials told Huang that “the potential for investment in the market and consumption in China is huge,” according to government news agency.

The controls are part of Washington’s broader goal to cancel the risk of supply chains for advanced technology away from China, and to reproduce semiconductors to the United States.

NVIDIA has announced this week’s plans to build 500 billion dollars in the United States’ international servers in the United States. US President Donald Trump later claimed that his re -election pushed Nafidia’s decision.

In March, the Taiwanese Semiconductor, which makes NVIDIA chips, announced that it will invest an additional $ 100 billion in advanced manufacturing facilities in Arizona.

Gary Ng, the chief economist in Natixis, told BBC that the latest developments show that global technology has become increasingly polarized between “two systems”, one dominated by the United States and the other by China.

“Technology will be less universal in this sense, and will be subject to more restrictions.”