00:00U.S. President Trump has given NVIDIA the green light to sell one of its top artificial intelligence chips to China.
00:07NVIDIA's H200 is just one generation behind its Blackwell chip, considered to be the world's most advanced AI semiconductor.
00:16Its standout feature is the massive 141 gigabyte memory capacity.
00:21That's nearly double the amount of the H100.
00:24It also provides 4.8 terabytes per second of memory bandwidth.
00:30That's the maximum rate at which data can be transferred between a processor and memory.
00:35Now all of this allows the H200 to handle huge amounts of data.
00:40It's powerful enough to develop self-driving systems and can offer faster and more responsive results for coding assistants like GitHub and Copilot.
00:49So what's in it for President Trump?
00:51Well, he's agreed to allow the chips to be shipped to approved customers in China and other countries on the condition the United States gets a 25% cut.
01:03Well, Rob Nice is a founding partner of H3 Capital, a London-based tech venture capital firm.
01:10Always great to have you on Global Business, Rob.
01:12So look, this is a major breakthrough for the company, NVIDIA, but also for the relationship between the United States and China, isn't it?
01:19Yeah, I suspect there's some backdoor horse trading that this is really a way to get off the rare earths discussion.
01:28But it looks good on paper and it looks good to everyone else.
01:31You mentioned rare earths.
01:32Does this shift mean we can expect concessions from China to the U.S. over rare earths?
01:38I would hope to think.
01:40I mean, the president has proven himself to be quite transactional.
01:43So usually when there's one give, there's another ask on the other side.
01:47So given the importance of the rare earths, I would think that's probably the single biggest give that China could give.
01:54Does this, as some analysts have been saying, increase the odds that the world will run on Chinese AI?
02:00I don't know.
02:03I think there's two separate questions.
02:05I mean, right now, the big Chinese companies, you know, they already have their offshore development centers where they can buy these kind of cards anyway.
02:11So they're not being prevented from using AI.
02:13You know, I think there's a lot of, you know, smaller research-oriented institutions, students that may have access to this now.
02:18And perversely, it sort of makes the market more friendly for NVIDIA if they have a global monopoly.
02:24That means there's less incentive versus a China that's trying to develop its own competing technology.
02:28So it probably sets back some of the domestic market in China that's trying to build competitors to NVIDIA.
02:34But it gives them more horsepower locally and will create more people that will could be globally.
02:38Before I ask you a bit more about that domestic market,
02:41the think tank Institute for Progress has said that the U.S. advantage over China diminishes from 10 times to at most five times with NVIDIA being able to export these H200 chips.
02:54But even if the gap between who leads does shrink, does it matter?
03:01A, I don't know what matters because most of these models are winding up in the open source.
03:05So whether they come out of China or wherever, they're open sourced.
03:08And likewise, I think the fears are a bit overblown right now.
03:13If you look at the Chinese developments, they've actually been very strong on how scarcity has benefited them for the well.
03:19They've figured out very efficient ways of using technology to get more juice out of that orange,
03:24where the American companies are far more profligate.
03:26So I think they'll have some interesting breakthroughs.
03:29They'll have access to the same technology now or similar technology one generation behind.
03:33And I think it's still a fair game.
03:35I want to talk to you now about China's domestic plans.
03:40Because what do you think this all does mean for their quest to develop similar technology at home?
03:45Because you and I have talked about more threads and that market debut, which, well, the share price was like 500 percent on day one of trading.
03:53To what extent do you think China's moved on?
03:58I think they're obviously going all in on AI the same way.
04:01And compared to the West, they have the benefit of being somewhat centrally planned and able to allocate resource to it.
04:06So I think they will be a very strong competitor.
04:09They may be a bit behind now.
04:10But, you know, I think they're going to catch up.
04:12And they'll be on an even playing field pretty soon.
04:15Fortunately, Silicon Valley has its own advancements.
04:17But I don't want to underestimate the advances that are going to come out of China with the money that will be thrown at it.
04:23Rob Nice, always great talking to you.
04:25Thank you very much.
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