US government warns Nvidia against circumventing China export restriction by redesigning chips


In context: Each time the US has brought out new rules prohibiting the export of advanced chips to China, Nvidia has created less-powerful versions to circumvent the restrictions. But US Commerce Secretary Gina Raimondo has warned Team Green that if it keeps up this practice, she will ban the new chips “the very next day.”

Speaking at the Reagan National Defense Forum in Simi Valley, California, on Saturday (via BNN Bloomberg), Raimondo said her department needed more funding to address China’s “rapidly growing” semiconductor markets to deny the country the most cutting-edge technology from the US.

“I have a $200 million budget. That’s like the cost of a few fighter jets. Come on,” she said. “If we’re serious, let’s go fund this operation like it needs to be funded.”

In September last year, the US further tightened sanctions against China by instructing Nvidia and AMD to stop selling their high-performance AI-focused GPUs to the country (and Russia), a restriction aimed at preventing the US companies’ top hardware from being used by or diverted to military users and finding their way into the nation’s supercomputers. Nvidia’s response was to create cut-down versions of the A100, A100X, and H100 chips: the A800 and H800.

The US government announced updates to its export restrictions in October, which meant the China-specific A800 and H800 chips and even the RTX 4090 were prohibited from export to countries of concern. Nvidia’s response was, once again, to create several new products – the HGX H20, L20, and L2 – that complied with the latest restrictions. The company is also rumored to be readying an RTX 4090 D for the Chinese Market with a lower TPP (Total Processing Performance) to comply with the US limitations.

Raimondo isn’t happy about Nvidia simply redesigning its chips to circumvent US export rules, threatening that “If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day.”

With around 25% of Team Green’s data center revenue coming from China, Nvidia has warned about the impact these bans will have on its bottom line. CFO Colette Kress previously said they would also result in a permanent loss of opportunities for the US to compete and lead in the Chinese market.

Raimondo acknowledged the financial impact the export bans have on companies, adding that there are more important things than money. “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,” she said. “Such is life. Protecting our national security matters more than short-term revenue.”


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