The United States and China are in a battle over computer chips, and it’s causing problems for companies like Nvidia, a big player in the chip industry.
The US government has just made some new rules about sending high-tech chips to China, and this has affected not only Nvidia but also other companies like Advanced Micro Devices and Intel.
These rules are meant to close some gaps that showed up when the US started limiting chip exports to China last October.
The main goal of these rules is to stop China’s military from getting their hands on super advanced computer chips or the tools to make them.
Nvidia, one of the companies affected by these new rules, has said that they can’t sell two of their top-of-the-line artificial intelligence chips, A800 and H800, to China anymore.
They’re also not allowed to sell one of their gaming chips.
Out of all the companies hit by these rules, experts think Nvidia will have the hardest time because a big part of their money (up to 25%) comes from selling chips for data centers in China.
When these rules were announced, Nvidia’s stock price, which is usually very high, dropped by as much as 4.7%.
The Semiconductor Industry Association, which speaks for almost all of the US chip industry, says these new rules are too strict and could hurt the chip business in the US without actually making the country safer.
They worry that these rules might push other countries to get chips from somewhere else.
The Chinese embassy is also not happy with these new rules. They’re against them.
These rules also affect Iran and Russia, and they’ll start in 30 days.
China reacted two months ago by putting restrictions on exporting two special materials, gallium and germanium.
These materials are super important for making computer chips.
China is a huge supplier of these materials, making 80% of the world’s gallium and 60% of its germanium.
These materials are a bit rare and are usually made as leftovers when other stuff is made.
Besides the US, both Japan and the Netherlands have also said that China can’t get their hands on some chip technology.
This back-and-forth between the US and China has raised worries about “resource nationalism,” which is when countries try to control important materials to have power over other countries.
