Chipmaker Nvidia (NVDA) has reportedly found a way to continue selling its high-end microchips and semiconductors to Chinese companies without violating American export controls aimed at curbing China’s access to western technologies.
China accounts for as much as 25% of Nvidia’s annual revenues and the company’s share price had been declining in recent weeks over fears that it would have to halt all shipments to the nation of 1.4 billion people.
But now, Nvidia appears to have found a work around and is expected to deliver three new microchips to domestic manufacturers in China.
The chips — called HGX H20, L20 PCle and L2 PCle — are based on Nvidia’s bestselling H100 microchip that is widely used in artificial intelligence (A.I.) applications.
However, the new chips that Nvidia will deliver to China only have about 50% of the computing power of the company’s H100 chip.
While Chinese companies and the government are reportedly unhappy about the low power chips, several executives have said that they have no better option at the moment.
Demand for A.I. computing power is rising in China as companies rush to develop local versions of chatbots such as OpenAI’s ChatGPT.
All three of Nvidia’s new low powered chips comply with current U.S. export restrictions pertaining to China.
Nvidia is also continuing to sell microchips to China that are used in electric vehicles being developed in the country.
The U.S. government has said that its focus with the microchip ban is on limiting China’s development of advanced technologies for its military.
Nvidia’s stock has gained 228% so far in 2023 and currently trades at $469.50 U.S. per share.