Nvidia Can Ship H200 Chips to China

Bloomberg

Watch Nvidia Can Ship H200 Chips to China - Bloomberg on Dailymotion

Transcript

00:00What do you make of this potential for Nvidia at least and whether or not China will indeed import

00:06the market reaction from your perspective? Well, this is a win for Nvidia, but it has to be taken

00:14with a pinch of salt because we already hear that there are tensions among US politicians

00:19regarding what this means for the national security for US is a very sensitive segment

00:24of business. China is unsure to let its own companies buy these chips for the same national

00:30security issues and also because they are backing the domestic chip production. So for Nvidia,

00:36which assumes that its China sales are now zero, every chip that's going to be sold to China is a

00:42bonus. It is a tailwind. But for long term forecasts, we still remain very much cautious regarding what

00:47this means and how stable the steel is going to be. Ipek, the base case assumption from Nvidia

00:54is right now in the fiscal year and maybe next fiscal year, zero revenues from China,

01:00that clearly this news has led everyone to recalculate. Would you assume some upside from

01:07Chinese AI data center chip revenue next year? Well, again, the geopolitical backdrop is so uncertain

01:16that the best thing to do in terms of the safest way to go with these assumptions is to keep that

01:24forecast at zero percent. But obviously, investors are happy to hear that there is an opportunity in

01:30China for Nvidia. But again, that opportunity is very much uncertain right now. We don't know if China

01:37is going to allow these chips to be sold. And again, we don't even know if the Chinese companies will be

01:42willing to buy these chips, given that it is politically very sensitive. And if they could

01:47use domestic alternatives, even though they are less efficient, maybe it's going to be a better deal for

01:54them, especially from a political and geopolitical perspective. So in my opinion, investors will

01:59continue to assume that the Chinese sales is the Nvidia's Chinese sales are going to be zero with a little bonus,

02:07maybe if some of these chips actually get sold. Ipek, bring us your global perspective. As you sit

02:13in Switzerland, this tussle between US and China to say who's got more dominance. But what do you hear

02:19from your perspective as to how far along China really is with its domestic chip manufacturing and use?

02:25Well, obviously, US and US technology is ahead of China. What China is good at doing is basically to find the

02:34chips to manufacture, manufacture chips in order to serve their own needs and serve the basic AI needs. So

02:43China is generally better in transforming their AI investments into real revenue, whereas the US is

02:52this prestige technology hub that's really aiming for the best. But even from the European perspective,

02:58where we could be a little bit more neutral, well, US is allies, first of all, and US is well ahead

03:03from a technology perspective than China. Then China is clearly coming. And the fact that these chip

03:09restrictions have hit the Chinese technology sector means that they will be accelerating their

03:15efforts and do anything in their power to catch the US technology.

03:19It really has been a mounting concern from some of these tech leaders that perhaps were underestimating

03:24how sophisticated China is. Is the market underestimating

03:28how superior TPUs are, how other chips are being manufactured by big tech players for their own

03:34inference? How much do we need to bake that into the Nvidia story?

03:38Well, I think that what TPUs are interesting, but they are actually, you know, serving in one particular

03:45area and that's AI. Obviously, the fact that Google is now out there and commercializing TPUs is a negative

03:55risk, is a negative factor for Nvidia. It is a risk in the sense that for those companies who are looking

04:01only for their AI applications, they would find it cheaper and as efficient as buying Nvidia's GPUs. But at the

04:09end of the day, Nvidia is not only selling chips, they're also selling the ecosystem that comes

04:14with it. So not every company is going to be comfortable going into the TPUs just because

04:19it's cheaper and is as efficient. I think that Nvidia still has the GPU market and the ecosystem

04:25well anchored and Google, for example, with this TPUs doesn't really have it.

Category

Transcript

Be the first to comment

Recommended