Nvidia reveals A800 chip for China amid U.S. export controls
Yahoo Finance’s Dan Howley discusses Nvidia’s new lineup of A800 chips with reduced speed aimed at navigating U.S. export controls to China.
Video transcript
AKIKO FUJITA: Nvidia is quietly offering an alternative to its product line widely used by Chinese tech giants after the US imposed new licensing requirements, banning its shipment to China. Nvidia's new lineup features similar specs with less bandwidth. Let's bring in Yahoo Finance's Dan Howley. He has the details here. Dan, we're talking about A100 versus A800. At the end of the day, these are not the advanced chips that Nvidia used to ship over to China, correct?
DAN HOWLEY: Yeah, these are different than the AA100. The A800 does have similar performance rates, that speed, that bandwidth that you discussed, that's slower. And when you're talking about trying to train these massive AI models that these kinds of chips are designed for, that can be a real detriment. And the idea here is for the US to limit the ability for China to catch up when it comes to AI in its military. And so that's why these restrictions were put in place.
Now the A100 was going to be a potential big money option for NVIDIA, though they said they had to cut $400 million out of potential China sales. Because of that, they did move to this A800, and some Chinese companies are preparing to offer it, though. And this also comes, though, as we saw Nvidia really struggle in Q2. It missed on earnings expectations. Its net income fell 72% year over year.
And that has to do with its gaming segment, which dropped 33% year over year and 44% quarter over quarter from Q2. The company also had guided for lower than expected. It was expected to bring in $6.9 billion in the next quarter, Q3. They said that they were going to bring in $5.9 billion, though. So really a tough comparison for NVIDIA, especially since we're rounding the holiday season where COVID was still a big issue as far as gaming, and it was pushing gaming higher.
They still make a huge amount of money off gaming and the data center, obviously. So it's kind of a one-two punch. The gaming industry isn't doing particularly well. And then you have this issue with China that Nvidia is dealing with. So it's not as good for them as it could be.
AKIKO FUJITA: Yeah, certainly not an issue unique to Nvidia, but interesting to see how they're dealing with that. Dan Howley, thanks so much for that.