Huawei, Intel, and an increasing number of semiconductor startups are challenging Nvidia’s dominant role in the artificial intelligence (AI) processor market, according to Nvidia’s chief executive Jensen Huang. The head of the world’s most valuable semiconductor company believes that companies like Huawei do not care whether Nvidia is U.S. based or not, they just compete for AI processor market from everywhere.
According to a Bloomberg report, Huang believes that Nvidia has a lot of competitors both inside and out of China and that competitors don’t really care where Nvidia is operating. They will compete with Nvidia in every location.
Huang’s comments come at a time when the company is trying to work closely with the U.S. government to ensure that its AI processors are compliant with the U.S. export rules. Nvidia commands some 90% of China’s AI processor market, according to some estimates, which means billions of dollars. China accounted for 21% of Nvidia’s sales so far this year and a huge portion of those sales should be attributed to AI and HPC processors, such as A100 and H100.
Since Nvidia can no longer sell A100, A800, H100, H800, L40, L40S, and GeForce RTX 4090 products to China due to the U.S. export regulations, the company is working with the U.S. government to come up with AI and HPC GPUs that it could sell it its Chinese clients.
“Nvidia has been working very closely with the U.S. government to create products that comply with its regulations,” said Huang in a Reuters report. “Our plan now is to continue to work with the government to come up with a new set of products that comply with the new regulations that have certain limits.”
Meanwhile, it looks like Department of Commerce secretary Gina Raimondo does not seem to allow export of any advanced AI processors to China at all.
“[China is] capable of doing very bad things, and we are going deny the entire country this class of equipment,” said Raimondo at the Reagan National Defense Forum, as reported by Jordan Schneider of Chinatalk. “We cannot let China get these chips. […] America leads the world in artificial intelligence. […] We are a couple years ahead of China. No way are we going to let them catch up. We cannot let them catch up. So we are going to deny them our most cutting edge technology.”
Denying China advanced processors from companies like AMD, Intel, and Nvidia means that these developers will be unable to earn billions of dollars. Raimondo argues that these companies could become what they are, because the U.S. is a democracy and they should be interested in the country’s long-term security to keep thriving.
“Democracy is good for your business,” Raimondo said. “Rule of law, here and around the world, is good for your businesses. It might make for a tough quarterly shareholder call, but in the long run, it is worth you working for us to defend our national security.”
Although Nvidia currently leads the AI and HPC GPU market, without its products in China, Chinese companies will inevitably grab that market with their offerings. Biren Technology and Huawei are obvious candidates to do so and once they hold that market, they will get some $7 billion per annum to develop new products.
