In a strange remix of a recurring theme, the US has ordered Nvidia to stop selling two of its top AI chips to China. The order will slow some Chinese Firms' work in advanced artificial intelligence and damage Nvidia's business in the nation.
⛔ Tech and Taiwan. Nvidia, and most chip companies, produce a lot of chips in Taiwan. Recent tension over the island nation and the US's investment in technological development has the US and China preparing for uglier relations.
💻 Nvidia has $400M in affected chips booked for sale this quarter. The company hopes to adjust the deal to non-affected chips. Hours after the news, stock value fell 6.6%.
🚢 China says the order is an attempt by the US to impose a tech blockade. The commerce ministry says this will impact the stability of the global supply chain.
📡 The US says they are acting to prevent advanced image and voice recognition chips from being used in military applications. A similar but single company restriction on chip sales by the Trump administration in 2020 also limited Chinese tech development.
TL:DR — China thinks of Taiwan as Chinese territory, not a neighbor. Taiwan has never agreed. The US has historically been on the side of making new allies as opposed to maintaining old rivalries. Also, there are a lot of semiconductor chips on the table.