US to block Nvidia’s sale of scaled-down AI chips to China, The Information reports

(Reuters) – The White House has told other federal agencies that it will not allow Nvidia (NVDA) to sell its latest miniaturized AI chips to China. The Information reported Thursday, citing three people with knowledge of the matter.

Nvidia has provided samples of the chip to many of its Chinese customers, according to the report.

The chip, known as B30A, can be used to train large language models when arranged efficiently in large clusters, the report said. This is a capability that many Chinese companies need.

An Nvidia spokesman told Reuters that the company “has zero share of China’s highly competitive data center computing market and does not include it in our guidance.”

The White House did not immediately respond to Reuters’ request for comment.

Nvidia is trying to change the design of the B30A in the hope that the US can achieve this. Referring to two company employees in The Information report, it was stated that the management would reconsider its attitude.

But the California-based company also faces regulatory issues in China.

Beijing recently issued guidance requiring all new data center projects that receive any government funding to use only domestically developed chips, Reuters reported on Wednesday, citing people familiar with the matter.

Data centers that are less than 30% completed will have to remove all installed foreign chips or cancel plans to purchase them, while more advanced-stage projects will be reviewed on a case-by-case basis, the sources added.

The directive effectively excludes Nvidia and its AI chips from a lucrative market segment, including advanced models that are under US export controls but still available in China through gray market channels.

(Reporting by ‌Eduardo Baptista in Beijing, ‌Shivani Tanna and Devika Nair in Bengaluru; Editing by Sherry Jacob-Phillips)