Nvidia, the most valuable US chipmaker, is likely to lose out on orders worth $5 billion from China due to Washington’s decision to implement chip export curbs targeting its key economic rival immediately, according to a report by the Wall Street Journal.
The orders were placed for 2024 by China’s top technology giants, including Alibaba, ByteDance and Baidu, the report noted, adding that Nvidia had planned to deliver some of them by November 15 – the initial deadline to restrict shipments of advanced artificial intelligence (AI) chips to China. However, a subsequent US order instructed Nvidia to curb those exports immediately, the company revealed in an exchange filing last week.
Nvidia will now have to cancel the $5 billion worth of orders, unless Washington’s grants it the licences necessary to make the deliveries, WSJ said. Chips affected by the latest US order include Nvidia’s A800 and H800, both of which the firm developed particularly for Chinese customers affected by the first round of export curbs in October last year.
Another affected chip is the L40S, which Chinese firms were looking to buy in place of A800 and H800 amid rumours that those chips might be targeted by the US, the WSJ said. Restrictions on these chips could lead to higher costs for China’s AI firms, the report added.
Nvidia’s share price has fallen more than 4% since reports of the immediate enforcement of US rules emerged. Shares of Baidu and Alibaba were down 4% and 2% respectively on Tuesday.
- By Vishakha Saxena
Read the full report: The Wall Street Journal