Nvidia's Chip Export Restrictions: The New Weapon in Great Power Contest?

Table of Contents

1. What is Nvidia?
2. Why is Nvidia called a world leader in artificial intelligence computing?
3. What are GPUs?
4. Who uses Nvidia chips?
5. Why has the US government restricted the export of Nvidia chips to some countries in West Asia?
6. Which countries have been banned from importing Nvidia chips in West Asia?
7. How many Nvidia chips have Saudi Arabia and the UAE ordered?
8. What is the reason for the surge in demand for Nvidia chips?
9. Why has Nvidia stock price gone through the roof?
10. How does the US's dominant position in tech companies give it leverage over the global economy?

Nvidia: A World Leader in Artificial Intelligence Computing

Nvidia is a company that has become one of America's biggest strategic assets. It calls itself a world leader in artificial intelligence computing and has been making headlines. The U.S. government has passed a new order that bars Nvidia from exporting chips to some countries in West Asia. This is a very significant move, and to understand why, we must understand what Nvidia makes.

What is Nvidia?

Nvidia makes a special kind of computer chips. They are called GPUs or Graphics Processing Units. They process graphics on computers. If You play games on your computer or if you're into graphic design, there's a good chance that you use Nvidia chips. They're very advanced, and the US sees them as a strategic tool. So much so that they're dictating who can get their hands on Nvidia chips.

Why is Nvidia called a world leader in artificial intelligence computing?

Nvidia is called a world leader in artificial intelligence computing because their chips are the driving force behind AI services. Artificial intelligence applications like chat GPT run on them. These chips are used to train chat GPT. In fact, most AI apps run on Nvidia chips. They're preferred because they can multitask. They can process multiple commands simultaneously, and they're the market leader in this game.

What are GPUs?

GPUs or Graphics Processing Units are a special kind of computer chips that process graphics on computers. They are very advanced and are used in gaming and graphic design.

Who uses Nvidia chips?

Nvidia chips are used by people who play games on their computers or are into graphic design. They are also used by artificial intelligence applications.

Why has the US government restricted the export of Nvidia chips to some countries in West Asia?

The Biden administration has issued orders blocking the sale of chips to some West Asian countries. Earlier, they restricted Nvidia chip sales to China, and this applied to Advanced chips. Washington feared that they would help the PLA, the Chinese Army. Now, we don't know which countries have been banned in West Asia. They have not shared names, and Nvidia's statement does not say very much. But most reports throw up two names: Saudi Arabia and the UAE.

Which countries have been banned from importing Nvidia chips in West Asia?

We don't know which countries have been banned from importing Nvidia chips in West Asia. However, most reports throw up two names: Saudi Arabia and the UAE.

How many Nvidia chips have Saudi Arabia and the UAE ordered?

Saudi Arabia bought 3,000 chips, and the UAE gave orders in a similar range, meaning thousands of graphics chips.

What is the reason for the surge in demand for Nvidia chips?

All countries and tech companies worth their salt are entering the AI race. Microsoft has Bing, Google has BART, China's Baidu has launched the Ernie bot, and Saudi Arabia and the UAE have their own plans. All of them need Nvidia chips, hence the unprecedented demand.

Why has Nvidia stock price gone through the roof?

It's a dream run for Nvidia. It's made them one of the most valuable companies in the world. The stock price has gone through the roof this year. They saw a jump of 234 percent, and the rally is far from over. Experts say Nvidia will rise further. Some are predicting a jump of 125 percent. Earlier this year, the company broke another Record. It entered the one trillion-dollar club. Today it is worth 1.2 trillion dollars, and this is a very small club.

How does the US's dominant position in tech companies give it leverage over the global economy?

American policies can dictate supplies and influence pricing. A favorable policy will keep supplies steady, and the price is low. But a protectionist approach will disrupt supplies and push-up prices. In other words, the US can weaponize its tech companies. This will lead to a trade war, but America would have a clear AdVantage. We've seen it in the recent past during the Trump years when the US used its dominant position. President Donald Trump announced trade restrictions. He forced countries to extend more favorable terms. And some of those policies are still in place. In this changing geopolitical landscape, corporate giants can be weaponized, and there is no guarantee that superpowers will wield this power responsibly.

Conclusion

Nvidia is a world leader in artificial intelligence computing, and their chips are used by people who play games on their computers, those into graphic design, and artificial intelligence applications. The US government has restricted the export of Nvidia chips to some countries in West Asia like Saudi Arabia and the UAE. All countries and tech companies need Nvidia chips to enter the AI race. The US's dominant position in tech companies gives it leverage over the global economy and can be weaponized. Nvidia's stock price has gone through the roof, and it is worth 1.2 trillion dollars.