In anticipation of new regulations in the United States, NVIDIA has been lobbying customers to place orders as soon as possible over the past few months
NVIDIA is actively lobbying Asian customers to place orders for advanced chips as quickly as possible before the implementation of new regulations in the United States. The new regulations restrict the export of advanced chips and require cloud service providers to pay attention to the destination of AI chips. Goldman Sachs pointed out that the United States lacks adequate power supply and suggested locating data centers in Canada, Australia, and Northern Europe. The new regulations have been criticized by companies like NVIDIA, which believe they could undermine the United States' leadership in AI and chip innovation
The new AI diffusion framework from the U.S. government is set to be implemented, with NVIDIA and cloud computing providers including Oracle accelerating the shipment of chips and servers to data centers outside the United States.
According to The Information, NVIDIA has been persuading its Asian customers to order advanced chips as soon as possible over the past few months. Meanwhile, Oracle has taken the unusual step of asking suppliers to ship unfinished products out of the U.S. for overseas assembly, hoping to ensure that more equipment is unaffected by the new regulations.
The Biden administration released this rule, which will take effect on May 15, before the end of its term. This regulation, known as the "Framework for AI Diffusion," aims to maintain the competitive advantage of the U.S. and its allies in AI development by restricting the export of advanced chips.
Under the new regulations, NVIDIA's advanced chips will require U.S. government approval to be exported to most countries. Cloud service providers will also have to pay closer attention to where they send AI chips.
The rule stipulates that 50% of a company's total computing power must be located in the U.S., and 75% must be in the U.S. or in one of the 18 countries considered U.S. allies. Data centers located in most other countries can only account for 7% of a company's total computing power.
Jared Cohen, President of Global Affairs at Goldman Sachs, stated that the U.S. does not have enough land to provide adequate power supply. However, he noted that Canada, Australia, and Nordic countries are reasonable alternatives.
One of the most complex aspects of the new rule is how it measures the GPU capacity that cloud service providers have in different countries. However, the rule does not count the number of GPUs but instead creates a metric to measure total processing power, partly because NVIDIA frequently releases higher-performing chips.
The rule has faced criticism from companies including NVIDIA and some Republican senators, arguing that it could harm the U.S.'s leadership in AI and chip innovation.
A spokesperson for NVIDIA stated that the Biden administration's AI diffusion rules "benefit foreign competitors and do not encourage anyone to invest in U.S. technology." A spokesperson for Dell indicated that the company is "working with the government on this rule to protect national security while ensuring that the U.S. maintains its leadership in AI and technology innovation."
According to Reuters on Tuesday, the Trump administration is considering modifying certain aspects of the new rules, which could alleviate the most severe impacts.
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