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this post was submitted on 04 Dec 2023
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The second Nvidia came out with that press release about a special China-specific version I was expecting this to happen. Honestly, I’m not quite sure what they’re thinking. Congress is CLEARLY trying to control the export of this technology and limit the access the PRC has to it. Trying to end-run what will likely become an ITAR issue (if it isn’t already) is an objectively bad corporate strategy. The penalties for that sort of thing are fucking serious.
Absolute boneheaded move by NVIDIA. Guess they just saw dollar signs and stopped thinking. What I don’t get is they are already at like 300% capacity I don’t think there will be any business short falls from selling only to US customers
I think it's quite clever actually.
They clearly realise that if China can't buy their chips, the CPC will put the full force of a planned economy behind making their own. Once that happens cheap Chinese AI chips will eat their lunch.
Everyone thought that would happen with Huawei. What actually happened was a whole bunch of major countries banned Huawei imports and a lot of the ones that allowed them in are having second thoughts. Germany, for example, is in the early discussion phase to remove Huawei equipment (which is already deployed) from their cell network.
Exactly. They want to maintain their insane margins with their oligopoly. The second you get a viable cheap competitor, it will all come crashing down.
Of course, it's a massive undertaking to catch up enough to be feasible. But China has the manufacturing experience, and a government initiative could allocate an insane amount of resources behind it if they were motivated to.
So it's obviously in NVidia's best interest to deter it with appeasement.
Also I assume things move much faster there unlike here where every move needs to be scrutinised and approved by 400 different people on 350 different committees.
Dictatorships are more efficient, at a cost
Depends. Most of them turn into inefficient corruption at every level. China is a bit unique where they have corruption at every level, but also fall in line or get axed whenever there's a big initiative that has too much visibility.
Results vary widely. But at least things get made, big and fast. Quality on the other hand...
Good point! Hadn’t thought of that
Really, the only big market that is being targeted by the restrictions is Mainland China (pointedly not including Russia because it’s honestly not a very big market compared to like… New York State or Texas or California). Nvidia would have been fine.
I think you’re right: they got greedy (shocking, I know)
Large tech companies have been known to buy out smaller competitors before they become a threat or before somebody else buys them out. Not being able to do so with a government-funded Chinese company, I imagine killing the idea before it takes shape is a prudent business decision.
Because capitalism is about making EVEN MORE the next year. And EVEN MORE the year after that.