Nvidia Offers Altered Gaming Chip For Chinese Customers Amid US Export Controls

In response to stringent U.S. export restrictions, NVIDIA Corp NVDA, the world’s leading chipmaker, is preparing to release a less potent variant of its premier gaming chip in China.

What Happened: Nvidia is marketing a pared-down version of its GTX 4090 D chip in China, Bloomberg reported. The version offered on Nvidia’s Chinese website possesses roughly 10% less processing cores than the international model.

The revised model, dubbed GeForce RTX 4090 D, was designed to “comply with U.S. government export controls” and will be exclusively available in China, as confirmed by a company representative.

Earlier, CEO Jensen Huang had declared the company’s intent to produce variants of its market-leading products that align with the export restrictions imposed by the Biden administration on exports to China.

Nvidia, after extensive consultation with the US government, will launch this graphics product in January. The US aims to impede China’s swift progression in artificial intelligence by limiting the availability of specialized chips.

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In order to adhere to U.S. export regulations, which were further tightened in 2022, Nvidia has introduced less powerful versions of its chips for China. After implementing additional restrictions in October, the company pledged to recalibrate its offerings for China, the largest chip market globally, to comply with new rules.

Despite this development, Nvidia’s stocks saw a marginal increase of less than 1%, reaching $497.10 at 12:25 p.m. in New York. This year, the stock has more than tripled, enabling Nvidia to become the highest-performing semiconductor stock in 2023 and the first in the industry to reach a market value of $1 trillion.

Why It Matters: Earlier this month, U.S. Commerce Secretary Gina Raimondo revealed that the U.S. was closely scrutinizing the development of three new artificial intelligence (AI) accelerators by Nvidia for the Chinese market to ensure compliance with export controls.

Meanwhile, competition in China’s AI chip market, which Nvidia dominates with a 90% share, has been escalating. Other chip manufacturers, including Tencent Holdings Ltd TCEHY, have been actively marketing their AI chips as alternatives to Nvidia’s products, hoping that US export restrictions will prompt clients to switch.

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