Photo by BoliviaInteligente on Unsplash
Commerce Department Warns Nvidia About Overseas Markets
December 5, 2023
U.S. Secretary of Commerce, Gina Raimondo, recently sent a clear message to tech companies like Nvidia that are producing artificial intelligence (AI) chips. The Commerce Department has implemented export controls to limit the sale of advanced AI chips, particularly to nations like China, where they could fuel both military modernization and economic competitiveness. These controls mandate companies to secure a federal license for overseas sales of such products, granting the government veto power over the transactions.
“I know there are CEOs of chip companies in this audience who were a little cranky with me when I did that because you’re losing revenue. Such is life. Protecting our national security matters more than short-term revenue.”
Gina Raimondo, U.S. Secretary of Commerce, via Fox Business
Given the dual-use potential of these cutting-edge AI chips, they can not only facilitate in escalating China’s military modernization but also contribute significantly toward its economic and technological advancement. As such, the implementation of stringent export controls serves the critical purpose of maintaining international security and balance.
The implications are clear: Chip manufacturers must tread carefully in their pursuit of overseas markets. The U.S. government is neither ignorant nor complacent about their endeavors, and it acknowledges the fine line between innovation and compliance and will take a firm stand to prevent any adverse effects on global security. As for the companies involved, they should take this as a reminder that with great technology comes great responsibility.
It’s essential to note that China isn’t the only nation at the receiving end of U.S. export restrictions that encompass AI chips. The Biden administration has broadened these limitations to include Vietnam and several Middle Eastern countries. Nvidia has clarified that while these include nations such as Saudi Arabia and the United Arab Emirates, Israel is notably exempt from the export controls.
During a recent earnings call, Nvidia’s chief financial officer, Colette Kress, shed light on the company’s future plans. She disclosed that Nvidia aims to manufacture products that align with export controls in the upcoming months.
“We are engaged with the U.S. government and, following the government’s clear guidelines, are working to offer compliant data center solutions to customers worldwide.”
Nvidia spokesperson via Fox Business
To provide further context, it’s worth mentioning a key piece of Nvidia’s financial performance. Kress noted that a significant portion of the company’s sales — approximately one-fourth — from its data center segment, which pulled in a hefty $14.5 billion revenue in Q3 of its fiscal year 2024, stems from countries impacted by the export controls.
Recent News
Planet Fitness Raises Monthly Fee After 26 Years
Planet Fitness, renowned for its budget-friendly $10-a-month membership plan, is embarking on a significant shift by increasing its basic fee for the first time in over two decades. The “classic” membership, allowing access to a single location, will undergo a 50% hike to $15 for new members commencing this summer.
McDonald’s Might Relaunch $5 Meal Deals
McDonald’s is gearing up to launch a $5 meal deal in the US, aiming to attract cost-conscious consumers back into its stores. The proposed deal may include a McChicken or a McDouble, accompanied by fries and a drink.
US Plans Tariffs on Chinese Electric Vehicles
The Biden administration intends to announce new tariffs on Chinese electric vehicles (EVs), possibly reaching 100%, along with additional import taxes on various Chinese goods, including semiconductors. This move aims to safeguard American manufacturing interests, amidst concerns that China’s competitive pricing may undermine US efforts to boost domestic clean energy production.
Columbus Walmart Shutdown Sparks Equipment Auction
A Walmart store in Columbus, Ohio, ceased operations due to underperformance and is now auctioning off its remaining retail equipment and merchandise. Located at 3579 S. High St., the store closed its doors in February, prompting a liquidation auction scheduled for Friday.