US gov fires a warning shot at Nvidia

https://www.pcgamer.com/us-gov-fires-a-warning-shot-at-nvidia-we-cannot-let-china-get-these-chips-if-you-redesign-a-chip-that-enables-them-to-do-ai-im-going-to-control-it-the-very-next-day/

by hunglee2 • 3 years ago

40 90 3 years ago

pcgamer.com

yawnxyz• 3 years ago

Doesn't Nvidia hold all the (literally/figuratively) chips here? If they told the US to screw off, wouldn't we see a huge migration of companies to Europe / other countries so they could purchase their GPUs?

SilverBirch4• 3 years ago

Yeah it would be easy, just close down their headquarters in Santa Clara, find a new semiconductor fab - because TSMC sure as hell isn't siding against the US, in fact neither is Samsung or Intel, so lets say build their own fab business. Then all they have to do is find a new set of customers because none of the US big tech companies like Google, Amazon, Microsoft etc. are going to join them...

seydor3• 3 years ago

China would be happy to use those ASML machines, I imagine

Wool2662• 3 years ago

Or you know, buy a senator or two and do whatever they feel like... Pretty sure some of the super ethical companies you listed would even chip in a few million. They are well on the way to eroding any kind of oversight as is. Just give them a bit more time.

amelius• 3 years ago

No, if they mess up one generation for one reason or the other, others will catch up and might take over their position. Apple came from almost nothing and built a GPU in a few years. I think the government might like their way of locking things down too. (Not a fan myself).

TerrifiedMouse6• 3 years ago

Worst case, the US government declares Nvidia a threat to national security, arrest its executives, and nationalize the whole company.

HenryBemis3• 3 years ago

If I were every other tech company I would be pooping my pants. So if the US gov plays this with Nvidia, what does stop them to do the same for the information in X, FB, YT, and any other trove of information? Unless (as we now know from the Twitterfiles) the US gov already has their hands on the information of all the aforementioned.

SilverBirch4• 3 years ago

I'm not sure what to think about this. Leaving aside whether this trade war is a good idea, I think this is a really bad look from Nvidia. It's not a good look to be undermining US sanctions, at the end of the day the US has the power to basically entirely crush Nvidia's exports into China. Given that's the case it would have been a lot smarter to work with the US gov to figure out what was an acceptable level for the exports they do, rather than play these bullshit games and risk a punitive response. The US really isn't joking about these sanctions.

leovingi2• 3 years ago

to figure out what was an acceptable level for the exports they do

But that is exactly what they did. The acceptable level of exports is whatever the law says it is and Nvidia followed the law. "to get around US export restrictions" is just a sneaky way of saying "to comply with US export restrictions".

SenHeng2• 3 years ago

There's following the letter of the law, then there's following the spirit of the law. This is when being a robot isn't helpful.

SilverBirch4• 3 years ago

That's not what happens. What happens is that the government comes out with something like "Hey, we don't want you to sell AI chips to China". Then with some beauracratic process - which almost certainly involves consulting with chip manufacturers - invents a set of rules get drawn. Then nVidia produce a SKU of their chip (note: not a new chip, a variant of one that clearly breaches the rules) that exactly matches the letter of regulation, but not the intent of the regulation.

Now, the reasonable thing to do as the regulator - is to acknowledge that the company you were asking for compliance from is acting in a hostile manner and modify the regulation to punitively clamp down on everything they're doing.

What I'm saying is that if I were the US in this situation I would be happily inviting nVidia to comply with the new rules that allows them to export anything above 100nm. Nvidia had their shot at meeting the regulation - the spirit not the letter, they blew it, they can live with the consequences.

noxs• 3 years ago

The US set new rules and Nvidia redesign/make new product to make sure they are play within these new rules. In other words, this is a process of Nvidia following the rules, how is this a bad look from Nvidia at all? If US really wants to ban all exports they should have done it at the beginning instead of playing this whac-a-mole game with entities at US, which turns out to be a very bad look from these bureaucrats that they don't know what they want and what they are doing.

SilverBirch4• 3 years ago

Let's be honest though - Nvidia aren't really redesigning their products at all. These chip companies don't work by manufacturing new variants. They produce one chip that does it all and they either fuse out or write firmware to limit them. So what will happen with these chips is exactly the same thing that happened with the crypto-disabled products they sold. They'll just buy the limited chips and then find a workaround. That was pretty much fine when it was just market segmentation with crypto, quite a different thing when you're participating in skirting sanctions.

TerrifiedMouse6• 3 years ago

I see it as a case of Nvidia obeying the letter of the law but not the spirit - hence these cat and mouse games with the US government; where they expend extra effort to work around the rules just so they can make money from China.

ben_w4• 3 years ago

Companies (theoretically) play by the rules. If those rules allow shenanigans, expect shenanigans. A government figure saying things like this is probably for the best, as it means they know not to waste time looking for loopholes… but even then, you can't expect companies to know what to take seriously in advance, given how much noise and fury signifying nothing normally comes out of talking heads.

Reminds me a bit of the UK banning all psychoactive substances when they got tired of playing whack-a-mole with what the press called "designer drugs", that hadn't technically been banned but which acted exactly the same as things which had been.

t324oi234j34344• 3 years ago

You're assuming that the USG is run by competent people rather than a bunch of petulant basket-weaving (okay, okay, polsci) majors.

seydor3• 3 years ago

first ASML ban, now Nvidia. Being so controlling with the world's manufacturing to such an extent may not end up well for the US

RandomLensman2• 3 years ago

Did kind of work in the cold war.

seydor3• 3 years ago

i m not sure the dutch would accept a US ban so easily during the cold war.

robertlagrant5• 3 years ago

This article seems extremely one-sided. The new products comply with the rules. Why are you changing the rules?

Grandstanding over power instead of just writing better rules doesn't seem like a great approach. Other people do all the difficult stuff, because if they stop they don't get paid. Getting paid (and lauded) for doing a bad job writing down some rules and complaining when they're followed is not great.

PaywallBuster• 3 years ago

the "spirit" of the law is to restrict access to china to advanced type of chips

so if the law is permissive enough it allows easily getting around it, they can just rewrite the laws or go after nvidia directly for breaking the "spirit" of the law

mytailorisrich2• 3 years ago

or go after nvidia directly for breaking the "spirit" of the law

The legal obligation is to comply with what the law actually says, not what the legislator possibly had in mind when they wrote the law...

robertlagrant5• 3 years ago

The sole job of people who get other people's money to do a job can't define what they want, and are being praised for bypassing the written rules they're meant to write. I think this isn't really acceptable.

hackerlight4• 3 years ago

The new products comply with the rules. Why are you changing the rules?

This should be obvious. They're changing the rules because the intention of the rule was being violated via a loophole that wasn't obvious when the rule was first made.

robertlagrant5• 3 years ago

Then why celebrate the people who can't write rules? Their incompetence is at best causing a lot of wasted effort.

extheat• 3 years ago

Tit for tat moves like this serves no legitimate public interest. The fact that Nvidia can even "redesign" and nerf chips on the fly should perhaps make it obvious to keen observers how ridiculous trying to control compute is. The bureaucrats have no idea what they're working with, a surface level grasp of technology and then naturally confabulate how impactful these trade wars are for political clout. If it were China doing this against the United States, what do you think would happen? Would we just bend over and deal with the slow tech? Or would we be pushed to work even faster? Obviously, all this is going to do is spur up domestic ASIC chip design and production. It's a net-win for China, with some short term pain.

andrewstuart• 3 years ago

Nvidia appears disinterested in US national security interests and sees sales restrictions as simply an obstacle to be gamed and snuck around.

tsukikage• 3 years ago

If we draw a line and say "everything on this side of the line is permitted", of /course/ Nvidia are going to try to sell the most expensive things that can be sold from the permitted side of the line. They have a duty to, within the bounds of the law, maximise shareholder profits. That's how capitalism works - it's how we've built basically all of western society.

Everything on the permissible side of the line we draw will be done. This is the entire purpose of having a line separating options into permissible and forbidden. So we shouldn't cross our fingers and lie about where we want the line to be drawn; we should make sure we draw the line where we actually want it to be.

If we don't want Nvidia selling anything at all in China, we need to say so already, rather than just shouting at them for doing things we said they were allowed to do.

ilaksh• 3 years ago

What's the ultimate goal that the US has in denying these chips? It's just strategically to slow down the military and other development of China, right?

Or are they hoping that China will give in to some political demand?

rhdunn• 3 years ago

Preventing China for using these chips for AI. So they cannot be used for things like LLMs, or possibly in espionage such as generating fake images, video, and audio.

hackerlight4• 3 years ago

It's just strategically to slow down the military and other development of China, right?

Probably this. Many in the foreign policy establishment expect a war with China within 10 years.

snovv_crash• 3 years ago

They only need to postpone China's military tech development until their demographic issues catch up with them. At that point China won't have the luxury of being expansionist and will need to settle down to take care of its aging population.

DeathArrow6• 3 years ago

It's just strategically to slow down the military and other development of China, right?

Not really. It is to hinder the economic and technological development of China.

tiffanyh• 3 years ago

Fiduciary Responsibility

This is a tricky one where it’s a lose/lose for Nvidia.

They have a fiduciary responsibility to investors to drive more revenue (while being compliant with laws), US gov doesn’t like that Nvidia is driving sales while technically being compliant to the letter of the law.

b1124• 3 years ago

They have far wider latitude with fiduciary responsibility, which is not a requirement. There are examples of such, and a primary would be a company taking an environmental stance. EG, leaving profit on the table for environmental reasons.

So it really isn't that tricky at all.

2OEH8eoCRo0• 3 years ago

No they do not. They have a duty to act in the interest of shareholders which basically means- don't abuse your position to enrich yourself.

RagnarD• 3 years ago

So rather than making China dependent on a U.S. supply chain, clearly the USG should block products and motivate China to spend billions to develop their own native chip design and manufacturing. Good thing they don't know how to make stuff.

Any bets on how long until Chinese chips are the cutting edge on the planet?

ikekkdcjkfke• 3 years ago

Considering everyone else is trying to catch up to nvidia it would be hard, but these players don't play by any rules..

dataking• 3 years ago

we all play by the rules of physics and nowhere is that more evident than in leading-edge semiconductor manufacturing ;-)

Phoenix12052023• 3 years ago

IMO, the really interesting thing are what becomes of the Taiwanese industry as the political situation (they have an election next year) develops. TSMC has applied for-and has received-an exemption from US prohibitions, as has Samsung up in South Korea. That speaks volumes.

DeathArrow6• 3 years ago

Any bets on how long until Chinese chips are the cutting edge on the planet?

Right now SMIC can produce 5 nm and 7 nm chips. That means about 5 years difference. I guess they can catch up in a decade if they invest enough resources, and will.

Having a domestic chip industry will be a huge win for China. Not only the chips will be much cheaper for them but they can export a ton while undercutting the competition. They will try to eat TSM, Samsung, Intel, AMD pies.

t324oi234j34344• 3 years ago

I'd bet even faster.

The West pretends that Taiwan is another country with another totally alien set of people who hate the mainland. However, that is not really the case. I imagine it's fairly easy to poach TSMC personnel, who well now realize that Taiwanese semi-conductor industry is going to be ruined by American meddling in the coming decade (much like they did of Japan's).

tommiegannert• 3 years ago

One thing I'm not clear about is whether this could be made up for by just making more. If the US is not exporting to China, that probably means they have a surplus of components for the rest of the world. So it's quite possible prices will go down enough that it's worth it for China to just keep all chips they produce, for "national security".

Is having one really fast and big chip that much better than having 10x 5 year old chips? (I have no idea how many chips they can produce, just wondering if being second really is that bad.)

lostmsu• 3 years ago

Where can I buy a 7nm device made by SMIC? (let alone 5nm)

saberience• 3 years ago

This is all on the US gov for creating regulations which they later realized were crappy.

The US gov created some rules which basically set some limit on the max bi-directional bandwidth of the chip, the max number of operations per second (4800 TOPS), and in the latest regulation they added another rule around “performance density”.

So basically they said something like: if you make a chip that has (in my arbitrary units) less than 100 TOPS, 500 bandwidth, and 200 performance density, then it’s OK to go to China.

So Nvidia made a chip that has 99 TOPS, 499 bandwidth, and 199 performance, which of course would be legal to export. And now the government is saying, well, we don’t like that. Which doesn’t make a lot of sense to me given they previously said they were OK with chips not hitting those limits being exported.

I don’t think you can blame Nvidia for taking the government at face value, assuming the government picked what they consider to be good values for their “chip banning equation” and then making chips that apply to the new rule.

This just seems to me like the US gov doesn’t know what they want exactly and thus keeps changing their regulation, none of which is a surprise to me. The whole thing reeks of incompetence.

appplication• 3 years ago

This just seems to me like the US gov doesn’t know what they want exactly

They know exactly what they want. Writing regulations to attain that without too many unintended consequences or negative impacts on the US is the difficult part.

DeathArrow6• 3 years ago

Well, US sanctions against China led China to develop their domestic semiconductor industry. SMIC can now fab 7 and 5 nm chips. In a decade, they will probably be on par with TSM.

Banning AI chips exports will have the same effect.

Long term US will lose money from sales while China will use their newly developed industries to earn more.

This move is only to win some votes at the next elections.

t324oi234j34344• 3 years ago

Seems quite stupid (as is expected from Govts.).

Reminds me of the Crypto ban that the USGOV was trying to impose in the 90s. Utter idiots running things as always.

maxglute2• 3 years ago

AI novel domain, no one knows what spirit of the law actually means with respect to AI other than some vague intentions of limiting PRC access to compute that can do military AI stuff. Even then, what does that actually mean? LLM models to help PLA shuffle paperwork, or coordinate drone swarms? What level of compute enables what, and what happens when models shrink to work on less powerful hardware.

Regulators made educated guess to legislate it as XYZ fixed levels of compute that's fraction of current compute, which doesn't scale, reasoning it will increase compute gap over time. Nvidia obeys law, because I surmise even they don't know what threshold of compute translates to what potential military capabilities - it would be crazy if were so integrated into US MIC that they do.

Queue Raimondo fires warning shot at Nvidia for following law. The logic behind these moves is to make doing business with PRC expensive in the hopes uncertainty would compel AI sector to reduce business with PRC out of their own volition. Because when US gov doesn't actually know how to regulate compute controls, thereby can't effectively regulate with rule of law, they resort to rule by law (PRC playbook) to shape behaviour. A few flip flops might seem like regulatory incompetence, but enough sustained flip flops to create enviroment of uncertainty is strategy.

US gov fires a warning shot at Nvidia

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