Analyst: China's Nvidia Investigation a 'Preemptive Strike'

TaiwanPlus News

Shares of U.S. AI chip powerhouse Nvidia tumbled after China launched an antitrust investigation into the firm, reportedly suspecting violations around its 2020 acquisition of Israeli chip designer Mellanox Technologies. For more, TaiwanPlus spoke with David Nicholson, chief research officer at the Futurum Group.

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00:00Given that NVIDIA's most advanced chips are already restricted from being sold in China,

00:06what exactly can Beijing achieve with this probe?

00:10NVIDIA is actually working on products that will meet the current regulations that are

00:17put on them by the U.S. government.

00:19So this does have real effects when it comes to their plans for expanding their market

00:26in China.

00:27But it is a bit of a preemptive strike, if you will, in a trade conflict that's going

00:34on with the new American administration that's coming in, stating its plans to be even harsher

00:41on China in particular.

00:43Subjectively, if you look at the regulations that the U.S. imposes on its partners in the

00:48world regarding what they're allowed to sell to China, it's pretty onerous.

00:55If you're an American and you think, well, yeah, of course, we should be able to tell

00:58everyone what to do, then OK, fine.

01:01But China says, no, we don't agree with that.

01:05And so this is a bit of a kind of telegraphing that they're ready to play this game if this

01:11is the game that we're going to play.

01:13And I expect there will be much, much more to follow.

01:17Technologically speaking, the U.S. is years ahead of China in terms of chip innovation.

01:22So what sort of leverage does China have to hit at the U.S. chip industry?

01:28I would look at it from the other direction.

01:30I would I would say let's gauge the U.S.'s ability to hinder China's ability to keep

01:38up and compete in the AI space.

01:42The sort of cliche narrative in the U.S. is that all China does is steal intellectual

01:50property and create their own fake versions of what someone else thought up.

01:57That is not an accurate overall characterization, whether we like it or not, in the United States

02:02of what's going on in China today.

02:04They have their own ability to develop things.

02:08It's just they're years behind.

02:10So as time goes by, they will catch up.

02:14Can the U.S. still slow China down?

02:16Yes.

02:17In the long run, this is all going to be moot.

02:22But in the meantime, these regulations do slow China down.

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