U.S. semiconductor giant Nvidia (NASDAQ:NVDA) has modified its flagship H100 chip to a new version called the H800, making it legal to export to China, Reuters reported. Last year, U.S. regulators implemented restrictions that forbade Nvidia and other companies from selling advanced chips and chip-making equipment to China to prevent the use of American technology in advancing China’s military power.
In particular, the export restrictions stopped Nvidia from selling its two most advanced chips, the A100 and the newer H100. These chips are used in developing generative artificial intelligence (AI) technologies. In November 2022, Nvidia designed the A800 by reducing the capabilities of the A100, thus making it eligible to export to China.
A company spokesperson told Reuters that the H800 chips are being used by cloud computing divisions of Chinese tech giants, such as Alibaba (BABA), Baidu (BIDU), and Tencent Holdings Ltd. (TCEHY).
Further, a chip industry source in China stated that the H800 reduced the chip-to-chip data transfer rate to about 50% of the flagship H100. Data transfer speed is vital when building AI models on huge amounts of data, as slower transfer rates increase the time taken to train the AI models, such as ChatGPT. The trade restrictions imposed last year set a threshold of below 600 gigabytes per second for data transfer rates of high-performance chips.
Overall, Nvidia has ensured that it continues to meet the demand for its chips in China. Additionally, the company is expected to significantly benefit from the accelerated focus on AI by tech giants to address the growing interest in ChatGPT-like technologies. At the GTC 2023 event held on Tuesday, Nvidia unveiled its new products for quantum computing and AI.
Is Nvidia a Buy, Sell, or Hold?
Wall Street’s Moderate Buy consensus rating for Nvidia is based on 25 Buys, five Holds, and two Sells. The average NVDA stock price target of $263.47 indicates that shares could be range-bound over the near term. The stock has rallied 79% so far in 2023.