U.S. in game of “catch me if you can” with Nvidia on rules

SHANGHAI (Reuters) – U.S. curbs on China have created a game of “catch me if you can” with U.S. chip giant Nvidia (NASDAQ:) and other companies, which affect the interests of both countries and will accelerate Chinese innovation, the Global Times newspaper said on Saturday.

The chip industry newsletter SemiAnalysisas reported earlier that Nvidia plans to release new artificial intelligence chips aimed at the Chinese market less than a month after the U.S. tightened rules on selling high-end AI chips to China.

“The several rounds between Nvidia and the U.S. government are the story of a high-tech enterprise that does legitimate business but encounters strong political interference in free trade, and tries every means to ensure its own survival and development,” the state-controlled newspaper said in a commentary.

“For commercial companies, this is not funny at all, and even a bit sad.”

The U.S. restrictions on chips, which seek to stop China from getting cutting-edge U.S. technologies to strengthen its military, were “not only harmful to China’s interests, but also to the U.S.”, the newspaper said.

“What the U.S. government has done makes normal and legitimate transactions tremble with fear, creating an intense atmosphere in the market,” it said.

Last month, Nvidia, whose graphics processing units (GPUs) dominate the AI market, said new U.S. export restrictions would block sales of two high-end AI chips, the A800 and H800, that it created for the Chinese market last year to comply with previous export rules.

The new rules put a cap on how much computing power a chip can pack into a small size. They include what analysts call a “grey zone” in which chips might still be allowed to ship to China but will require a license.

SemiAnalysis said the new Nvidia chips are called the HGX H20, L20 PCIe and L2 PCIe and the company could announce them on Nov. 16. The chips include most of Nvidia’s newest features for but have had some computing power measures cut back, according to the newsletter. Nvidia declined to comment.

The Global Times said U.S. companies had been looking for “workarounds” to comply with the regulations.

“It is not difficult to imagine that as long as Washington remains committed to ‘choking’ China, the game of ‘catch me if you can’ will continue indefinitely,” the newspaper said.

“In this sense, the ‘loopholes’ that the U.S. is trying to close will never be completely fixed, and they will only find themselves in an awkward situation of pressing one end of the gourd only to make the other end float up.”

“This will inevitably force and accelerate the process of independent innovation in high-tech industries in China.”