This is more a tit-for-tat with Trump tariffs and trade embargoes. I don’t think the Chinese state leadership cares about going heads up with NVIDIA in the public market, even if they’re hosting the inferior brand (for now). They’ve been operating as a second-best option in manufacturing and tech for decades as they built up their capacity.
But this kind of power move is a kick in the teeth to some of Trump’s wealthiest supporters. It gives Chinese diplomats enormous leverage as they go into another round of trade negotiations with a country whose economy increasingly revolves around making and selling chipsets.
Edit: Incidentally, NVIDIA has $165B/year in revenue and a $4.5T market cap. Just think about that for a minute.
You’re right about that, BUT I’d argue that’s all small potatoes. If no one develops on Chinese chips, then they’ll never actually be competitive. The only way for China to push ahead in any capacity, or even to catch up is to have thousands of users on their chipsets.
Let’s look at the MooreThreads MTT80. When it started it was performing like a 2017 GPU GT1030. They did 0 hardware upgrades. I will repeat that 0 hardware upgrades. But today, it’s able to run the domestic game Black Myth WuKong at 4k at 40 fps. Yes I realize that means it stutters, but with no hardware changes they were able to make a fairly demanding modern game playable. What this has rang through out China I am sure is, China has to do everything on earth to fix their software. If that means banning NVIDIA, so be it.
If no one develops on Chinese chips, then they’ll never actually be competitive.
People will develop on Chinese chips because they’re cheaper and more open-sourced. Also, because their specs are written in Chinese rather than English and that’s their native tongue.
But today, it’s able to run the domestic game Black Myth WuKong at 4k at 40 fps.
That’s not because of a chip import policy the state issued last week. Someone’s obviously working on these things, even without a bunch of state-issued trade restrictions.
What this has rang through out China I am sure is, China has to do everything on earth to fix their software. If that means banning NVIDIA, so be it.
NVIDIA does not have the export capacity to feed the entire Chinese state’s demand for new hardware. Never did. The real reason for a domestic Chinese investment in tech is that China is also a global leading consumer. They need to fab their own chips for the same reason they need to build their own cars and grow their own rice. Their economy can’t work as an import economy when they represent 16% of the global population.
This change in policy will undoubtedly accelerate domestic investment in new software. But it wasn’t strictly necessary.
The problem is the Chinese chips are not cheaper. Huawei’s 910c is about 30% slower and 1/3 more expensive. Add on top of that a lack of software, without government force, who would buy it?
Huawei’s 910c is about 30% slower and 1/3 more expensive.
NVIDIA H100s are currently going for around $25k to Huawei’s $28k. And that’s before you get to the secondary market, where NVIDIA chipsets will inevitably jump in price based on availability and relative demand. Without Huawei in the market, I guarantee NVIDIA’s chips would be even more expensive.
At some point, its just a matter of what is available. American tech companies are demanding more chipsets than NVIDIA can currently produce, which is why the company’s still considered a growth investment play. Chinese competitors aren’t going to be able to import NVIDIA to meet their own internal demand. They’ll buy Huawei units because that’s what is on the shelf.
I don’t think you realize it, but your proving my point. I never said no Huawei chips would be sold. I said China wants to reach criticality with it’s users. With Huawei chips being more expensive and less capable, the big boys won’t buy Huawei. And the secondary market doesn’t matter to the big boys who will get it at MSRP because orders always go to them first. Since they have the most users and will have the most exposure for stress testing.
The last thing China wants is for Huawei to only sell to smaller companies and start ups where it’s entirely possible there will be no users and money wasted. That’s why the new law only targets the major companies.
*Edit on that point I’m going to predict the future now. In a few months we’re going to see an article saying China has bought record amounts of H20s and NVIDIA’s stocks are going to go up again. This is because the smaller companies are still going to be buying and at MSRP because the big boys can’t.
a few months we’re going to see an article saying China has bought record amounts of H20s and NVIDIA’s stocks are going to go up again. This is because the smaller companies are still going to be buying and at MSRP because the big boys can’t.
I would not bank on it, but I guess we’ll see.
At the moment, NVIDIA and CoreWeave are busy swapping spit while Trump is throatling the export economy at record speed.
This is more a tit-for-tat with Trump tariffs and trade embargoes. I don’t think the Chinese state leadership cares about going heads up with NVIDIA in the public market, even if they’re hosting the inferior brand (for now). They’ve been operating as a second-best option in manufacturing and tech for decades as they built up their capacity.
But this kind of power move is a kick in the teeth to some of Trump’s wealthiest supporters. It gives Chinese diplomats enormous leverage as they go into another round of trade negotiations with a country whose economy increasingly revolves around making and selling chipsets.
Edit: Incidentally, NVIDIA has $165B/year in revenue and a $4.5T market cap. Just think about that for a minute.
You’re right about that, BUT I’d argue that’s all small potatoes. If no one develops on Chinese chips, then they’ll never actually be competitive. The only way for China to push ahead in any capacity, or even to catch up is to have thousands of users on their chipsets.
Let’s look at the MooreThreads MTT80. When it started it was performing like a 2017 GPU GT1030. They did 0 hardware upgrades. I will repeat that 0 hardware upgrades. But today, it’s able to run the domestic game Black Myth WuKong at 4k at 40 fps. Yes I realize that means it stutters, but with no hardware changes they were able to make a fairly demanding modern game playable. What this has rang through out China I am sure is, China has to do everything on earth to fix their software. If that means banning NVIDIA, so be it.
People will develop on Chinese chips because they’re cheaper and more open-sourced. Also, because their specs are written in Chinese rather than English and that’s their native tongue.
That’s not because of a chip import policy the state issued last week. Someone’s obviously working on these things, even without a bunch of state-issued trade restrictions.
NVIDIA does not have the export capacity to feed the entire Chinese state’s demand for new hardware. Never did. The real reason for a domestic Chinese investment in tech is that China is also a global leading consumer. They need to fab their own chips for the same reason they need to build their own cars and grow their own rice. Their economy can’t work as an import economy when they represent 16% of the global population.
This change in policy will undoubtedly accelerate domestic investment in new software. But it wasn’t strictly necessary.
The problem is the Chinese chips are not cheaper. Huawei’s 910c is about 30% slower and 1/3 more expensive. Add on top of that a lack of software, without government force, who would buy it?
NVIDIA H100s are currently going for around $25k to Huawei’s $28k. And that’s before you get to the secondary market, where NVIDIA chipsets will inevitably jump in price based on availability and relative demand. Without Huawei in the market, I guarantee NVIDIA’s chips would be even more expensive.
At some point, its just a matter of what is available. American tech companies are demanding more chipsets than NVIDIA can currently produce, which is why the company’s still considered a growth investment play. Chinese competitors aren’t going to be able to import NVIDIA to meet their own internal demand. They’ll buy Huawei units because that’s what is on the shelf.
I don’t think you realize it, but your proving my point. I never said no Huawei chips would be sold. I said China wants to reach criticality with it’s users. With Huawei chips being more expensive and less capable, the big boys won’t buy Huawei. And the secondary market doesn’t matter to the big boys who will get it at MSRP because orders always go to them first. Since they have the most users and will have the most exposure for stress testing.
The last thing China wants is for Huawei to only sell to smaller companies and start ups where it’s entirely possible there will be no users and money wasted. That’s why the new law only targets the major companies.
*Edit on that point I’m going to predict the future now. In a few months we’re going to see an article saying China has bought record amounts of H20s and NVIDIA’s stocks are going to go up again. This is because the smaller companies are still going to be buying and at MSRP because the big boys can’t.
I would not bank on it, but I guess we’ll see.
At the moment, NVIDIA and CoreWeave are busy swapping spit while Trump is throatling the export economy at record speed.
But hey, time will tell.