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Last week was filled with reports that the U.S. government has ordered Nvidia to stop selling its A 100 and H 100 graphics cards to China.

The U.S. government will allow the development of the H 100 Artificial Intelligence chip in China, according to the company.

The move led to speculation about the impact on Chinese firms and their ability to compete in areas of artificial intelligence. There were questions about the impact on China.

According to Handel Jones, CEO of International Business Strategies, the cost to develop the H 100 is in excess of $1 billion, and it took two years for the design to be implemented.

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Short- and long-term impact on Nvidia

In the next two quarters, the company's revenues could be reduced by $400 million, according to Jones. The $400 million in Chinese sales of the affected chips could be lost if customers don't buy alternatives.

The loss of the China market will result in Chinese companies producing their own artificial intelligence products. China will have a leadership position in many areas of artificial intelligence by the year 2030 according to him.

He said that the A 100 and H 100 products are critical for training artificial intelligence in data centers.

The organization expects additional restrictions to be placed on the sales of Semiconductor products to China in order to grow the market.

U.S. government concerns

According to Dan Pickard, international trade and national security expert and attorney at Buchanan Ingersoll & Rooney, China's state-led industrial policies are meant to advance both their commercial interests and their military development.

One month after President Biden signed the CHIPS and Science Act into law, the export ban occurred. Two days ago, the U.S. Commerce Department gave a description of its plans to distribute the money.

Pickard said it is difficult to overstate the concerns of the US government.

Nvidia export ban impacts Chinese universities

The export of a U.S. computing chip to China has been restricted due to a recent review showing that high-profile universities and state-run research institutions in China have been relying on it.

The review shows that Tsinghua University, China's highest-ranked higher education institution, spent over $400,000 on two artificial intelligence supercomputers, each powered by four A 100 chips.

Some Chinese companies said the U.S. restrictions wouldn't have a big effect. CNBC reported yesterday that Nio said U.S. restrictions on chip sales to China wouldn't affect the company's business.

According to the article, William Li, founder, chairman and CEO of Nio, said that their computing power is sufficient for the development of their artificial intelligence training. We have worked very closely with our partner.

More controls likely to come

According to Pickard, the United States is in a contest with China to see who will be the leader in 21st century technology. He said the contest is at its hottest in regards to artificial intelligence.

He said that Chinese companies should be concerned.

There is bipartisan concern about controlling the export of key technologies to China. There will be more controls on exports to China for a long time.

He said that U.S. companies will need to be more vigilant in regards to the export of national security sensitive items to China and Russia.

The President has wide discretion in regards to prohibiting the export of U.S. goods, technology and services under the existing export controls.

Over the last several administrations, these laws have been used more aggressively.

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