GPU powerhouse Nvidia has informed customers in China it is delaying the launch of a new artificial intelligence chip.

Reuters reported, citing two sources familiar with the matter, that Nvidia had designed the AI chip to comply with US export rules until the first quarter of next year.

Last month it had been reported that Nvidia may be forced to cancel orders of advanced AI chips worth up to $5 billion (£4bn) intended for Chinese customers, due to tightened US government export restrictions introduced in October.

H20 Chip

Reuters, citing the two sources, reported that the delayed chip is the H20, the most powerful of three China-focused chips that Nvidia has developed to comply with the latest US export restrictions.

The delay could complicate efforts by California-based Nvidia to preserve its market share in China against local rivals such as Huawei.

Reuters cited a report from chip industry newsletter SemiAnalysis that Nvidia had been expected to launch the new products as early as 16 November.

However, the H20 launch has now been pushed back until the first quarter of next year, the sources told Reuters, with one saying they were advised it could take place in February or March.

Nvidia reportedly declined to comment, and although it has benefited from demand from other countries for its chips, the firm has rankled against the US export restrictions to China and has previously warned the restriction would cost it financially.

Nvidia is seen as a key player in the AI field.

A few months ago Nvidia revealed it is building a supercomputer specialised for generative AI tasks in Israel that will be one of the world’s fastest high-performance systems.

Integration problems?

But why exactly is Nvidia delaying a chip that it could still be allowed to sell to the valuable Chinese market?

Well the sources told Reuters that the H20 was being delayed due to issues server manufacturers were having, whilst integrating the chip.

In addition to the H20, Nvidia has been planning two other chips to comply with new US export rules – namely the L20 and L2.

The sources said the L20 was not facing delays and would launch according to its original schedule. They were unable to share information on the status of the L2.

Nvidia had already been banned from shipping products including its advanced A800 and H800 AI chips by Washington’s tightened export rules.

The A800 and H800 were introduced as alternatives for Chinese customers in November 2022, about a month after the US first banned exports of advanced microchips and equipment to China.

China in October heavily criticised the latest US export controls.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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