US government and Nvidia clash as chip war escalates

Nvidia’s new tactics to get sanctioned chips to China have not gone unnoticed as the Biden administration sends a warning to the company.

Jensen Huang and Nvidia have been sent a stark warning from the US government. To get around the current sanctions, Nvidia has been redesigning certain chips to get them around the US government’s mandates.

Nvidia’s chips have been embroiled in the sanctions, with the Biden government aiming mostly at high-end AI chips. However, Nvidia warned earlier this year that doing so would simply advance China’s output.

Now, US Commerce Secretary Gina Raimondo has responded to Nvidia fabricating chips that undercut the sanctions. In a quote picked up by Fortune and Dan Nystedt, she said:

“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day.”

Nvidia received a stern warning from US Commerce Secretary Raimondo on China export controls, media report:
“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” she said, in a speech. 1/3 $NVDA…

— Dan Nystedt (@dnystedt) December 3, 2023

She continues to say that “China is not our friend” and that its government is “the biggest threat we’ve ever had.”

Since the sanctions, China’s output in terms of powerful chips has begun to show results. Huawei’s latest phone chip took the US government by surprise when it could perform similarly to Qualcomm’s from a couple of years ago.

Nvidia attempts to find ways around US sanctions

Nvidia’s chips are all built off of one massive source, a die. This is then cut down to suit the needs of the particular product. In the ensuing chaos, the RTX 4090 has been sanctioned too. The consumer card is powerful enough to act as a major component in AI machines.

To get around this and continue selling the card in China, they cut the power down slightly and introduced the 4090 D. This card will be sold exclusively in China, and also should help Nvidia scupper any plans from surrounding countries to scalp China.

We’ll have to wait and see if the US government wakes up and decides to sanction the new 4090 D. However, Secretary Raimondo did add that:

“Every day China wakes up trying to figure out how to do an end run around our export controls.

“Which means every minute of every day, we have to wake up tightening those controls and being more serious about enforcement with our allies.”

A Nvidia Spokesperson has reached out to Dexerto with the following comment.

They said: “We are engaged with the U.S. government and, following the government’s clear guidelines, are working to offer compliant data center solutions to customers worldwide.”