However, Nvidia is facing challenges as Chinese companies are losing interest in its downgraded chips and are turning to local chipmakers, who are offering their own chips as safer alternatives. Companies like Alibaba and Tencent are shifting some orders to Chinese companies like Huawei, which has a new AI chip comparable to Nvidia’s offerings. Nvidia's CFO has warned that U.S. restrictions could lead to a “permanent loss of opportunities for the U.S. industry to compete and lead in one of the world’s largest markets.”
Key takeaways:
- Nvidia is facing a dilemma in China due to the Biden administration's concerns that the company's chips could pose a national security risk.
- The company announced partnerships with four car manufacturers—Li Auto, Great Wall Motor, SEEKR and Xiaomi—to use Nvidia's DRIVE technology in their automated driving systems.
- Nvidia is planning to start mass production of a new set of semiconductors designed for the China market that comply with updated U.S. export restrictions.
- Chinese companies are showing less interest in Nvidia's chips due to fears of further U.S. restrictions and are turning to local chipmakers like Huawei for alternatives.