By coinnews 
00:00 Speaker A
We got these reports China’s Huawei planning a new AI chip. They say for mass shipment. It’s from Reuters. Looking at Nvidia, they’re down about 6% in today’s trade. Stacey, you cover the name. What do you make of that headline?
00:18 Stacey Rasgon
To be honest, I don’t see why it matters. Nvidia’s not allowed to sell anything in China anymore, as it relates to AI. So who cares? I mean, to be honest, this is my issue with the ban that we got last week on Nvidia’s China offerings and they’ve already been heavily constrained by export controls. The part that they were allowed to sell in China, it was called H20. The performance was already very limited. And the parts that Huawei had available actually are, they have better performance. They’re missing some other things, software compatibility, but they have better performance. After last week, and then the government is now requiring licenses, licenses for Nvidia, even to ship that low-end part. So effectively they can’t ship any AI parts into China anymore. So to be honest, we’ve basically just handed the China AI market to Huawei anyways. So like I’m not surprised by any of this at all. And you know, at least from where we’re standing now, I don’t know that it matters. Like I said, they they they can’t compete anyways. They’re not allowed.
02:13 Speaker A
I mean, so, okay, so let’s assume Stacey that policies are not permanent, right? And that you get a change in administration in a few years and things change again. Does this give Huawei such a hard head start that even if the policy changes, you know, it’ll give it a leg up. How you know, how are you thinking sort of longer term?
03:08 Stacey Rasgon
Yes, and then you have to remember that the policies that were in place until last week were actually put there under the Biden administration, not under the Trump administration. And so, that low-end part that Nvidia was allowed to ship until last week was already well below, you know, Huawei’s offerings and frankly, I doubt that those thresholds were ever going to get raised and so the gap between, you know, what Nvidia was allowed to ship and frankly, the local capabilities was going to get bigger and bigger over time anyways. So, no, I think we were going down this path as it stands. Nvidia has even talked about the China market getting more and more competitive and you can even look at their sales into China. They I think they did about 17 billion last year, was probably about 12 billion in AI sales. That was the largest on an absolute basis that they’ve ever shipped, but as a percentage of their total revenue, was the lowest in over 10 years. Right? So China increasingly was becoming less important to them. They were getting decoupled because of the nature of these policies that were put in place. And again, it wasn’t really Trump until recently, this was the Biden administration.