Tuesday, October 31st 2023
NVIDIA Might be Forced to Cancel US$5 Billion Worth of Orders from China
The U.S. Commerce Department seems to have thrown a big spanner into the NVIDIA machinery, by informing the company that some US$5 billion worth of AI chip orders for China falls under the latest US export restrictions. The orders are said to have been heading for Alibaba, ByteDance and Baidu, as well as possibly other major tech companies in China. This made NVIDIA's shares drop sharply when the market opened in the US earlier today, by close to five percent, dropping NVIDIA's market cap below the US$1 Trillion mark. The share price recovered somewhat in the afternoon, putting NVIDIA back in the trillion dollar club.
Based on a statement to Reuters, NVIDIA doesn't seem overly concerned, despite what appears to be huge loss in sales, with a company spokesperson issuing the following statement "These new export controls will not have a meaningful impact in the near term". The US government will implement these new export restrictions from November, which obviously didn't give NVIDIA much of a chance to avoid them and it looks as if the company is going to have to find new customers for the AI chips. Considering the current demand for NVIDIA's chips, this might not be too much of a challenge for the company though.
Source:
Reuters
Based on a statement to Reuters, NVIDIA doesn't seem overly concerned, despite what appears to be huge loss in sales, with a company spokesperson issuing the following statement "These new export controls will not have a meaningful impact in the near term". The US government will implement these new export restrictions from November, which obviously didn't give NVIDIA much of a chance to avoid them and it looks as if the company is going to have to find new customers for the AI chips. Considering the current demand for NVIDIA's chips, this might not be too much of a challenge for the company though.
39 Comments on NVIDIA Might be Forced to Cancel US$5 Billion Worth of Orders from China
Who knows maybe Uncle Sam would take greater offense to it though being related to AI rather than just storage.
This cartoon is so clever.
In any case, If China really really wanted something. They will find ways to get it. There are 3rd parties who are willing to smuggle things to them if the price is right.
I'd rather live in China then the US, no doubt.
www.statista.com/chart/30940/data-center-revenue-by-country/
They are pulling figures out of thin air and im sure China has a lot more data centers
NVidia will have to lower prices to sell through that inventory. Less profit, but no losses.
Just more evidence that NVIDIA is NOT an American company (being founded in a territory is not the same as established roots) and has NO American, and its people, interest, first.
www.businessinsider.in/politics/china-has-started-ranking-citizens-with-a-creepy-social-credit-system-heres-what-you-can-do-wrong-and-the-embarrassing-demeaning-ways-they-can-punish-you/articleshow/63666457.cms
Number of cabinets in chinese data centres per year. In millons. Expectations to end of 2023 are for "It is expected that the number of data center cabinets in China will reach 7.76 million in 2023" (sorry non human translation).
The number of facilities is not always important. There might be a data center in China with a hundred times more cabinets than the average American data center. Nvidia in trouble.
Also all of you idiots saying that NVIDIA will ignore export restriction controls over this, are just that - idiots. NVIDIA is greedy, not stupid, and they don't need to break any laws when their products are in such high demand. Understand the basics of economic supply and demand before you make stupid comments that show how uneducated you are, FFS.
And no, that's not funny.