Nvidia delays launch of an AI chip for China

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Nvidia (NASDAQ:NVDA) has told customers in China it is delaying the launch of a new artificial intelligence chip made to abide by U.S. export regulations until the first quarter of next year, Reuters reported citing people with knowledge of the matter.

Launch of the chip known as H20, the most powerful of three China-focused chips which Nvidia has made, is getting delayed due to issues server makers were having in integrating the chip, the report added.

The launch has now been pushed back until the first quarter of next year, with one person noting that it could take place in February or March, according to the report.

Earlier in November it was reported that Nvidia (NVDA) planned to announce three new chips for China. The chips were HGX H20, L20 PCIe and L2 PCIe and local media outlet STAR Market Daily had noted that the U.S. tech giant could announce them on Nov. 16.

The L20 was not facing delays and would launch as per its original schedule but the sources were unable to provide information on the status of the L2, according to Reuters’ report on Friday.

In October, the U.S. brought in new updates to its export restrictions which curbed the sale of chips that Nvidia (NVDA) made for the Chinese market, such as the A800 and H800 chips, as part of Washington’s efforts aimed at hindering China’s access to advanced semiconductor technology. Last year, the U.S. imposed rules restricting Nvidia from selling its A100 and H100 chips to China, after which the company had come up with A800 and H800 chips as alternatives for the Chinese market.

Nvidia has held over 90% share of China’s $7B AI chip market, however, as per analysts the U.S. restrictions may benefit local players such as Huawei Technologies.

Chinese internet search giant Baidu (BIDU) had reportedly ordered AI chips from Huawei. The company ordered 1,600 of Huawei’s 910B Ascend AI chips — which were developed as an alternative to Nvidia’s A100 chip — for 200 servers.

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