American chipmaker Nvidia has driven its stock price up sharply because of its brilliant financial report in the fourth quarter of 2023, and its market value has increased in a single day to set a new Wall Street record. However, in the case of "a good situation", Nvidia also has to spend attention and energy to solve a major concern it faces: due to the repeated escalation of chip export restrictions to China by the United States, Nvidia's revenue in China has fallen sharply.
On the day of the earnings announcement, Nvidia CEO Jensen Huang revealed to ** that Nvidia is currently providing customers with samples of two new AI chips for the Chinese market and is waiting for user feedback. This is Nvidia's latest statement after being forced to design and produce chips specifically for the Chinese market twice in order to circumvent U.S. export controls, but the "downgraded" version of the chip was reported to be cold in China.
In order to protect the Chinese market, Nvidia cannot be said to be without effort and care. NVIDIA's emphasis on the Chinese market is based on a rational attitude towards business and market thinking. As the Chinese market, which once accounted for one-fifth of its revenue, the price of complete loss is difficult for even Nvidia, which has been crowned the "king of AI" by the market, to accept. Huang has repeatedly said that "there is only one Chinese market in the world." Wall Street's previous analysis also said that "the biggest risk to Nvidia's broad prospects is China". At this point, Nvidia, which is based on the market, must certainly show more pragmatism than politicians in Washington.
Nvidia has achieved such success today in large part because it has seized the market, and it understands its market and its future. Is it possible to achieve win-win cooperation with China in the field of science and technology in the policy gap unilaterally set by the United States, and we hope that NVIDIA will succeed. However, Nvidia knows very well that there will not be a big market waiting for it to figure out how to occupy it. At a time when the United States has set up multiple obstacles to promote the "decoupling" of science and technology from China, China's independent innovation in science and technology has begun to accelerate. Nvidia's "downgraded" chip is cold in the Chinese market, not only because of the unwillingness of Chinese customers, but also because of the progress of China's independent innovation chips.
According to ** reports, Nvidia recently listed Huawei as a major competitor in several categories such as AI chips for the first time in a document submitted to the US ** Exchange Commission. Nvidia has not yet commented. We would like to say that, first of all, this can be seen as Nvidia's recognition of Huawei's progress in the field of AI chips; Second, this once again shows that political interference in the "small courtyard and high walls" is often counterproductive and cannot stop China's pace of independent innovation, and calls on Nvidia and other American companies to respond to the catch-up of their Chinese counterparts with an open, inclusive, and healthy attitude. We believe that NVIDIA can do this, and this is a good industrial ecology.
In terms of NVIDIA's attitude towards the Chinese market, it is worth pondering that for this new field that requires large-scale infrastructure construction, the most prominent situation is that demand exceeds supply. The key is to make the possibility of AI greatly improving productivity and economic growth come true as soon as possible through more landing applications and scenario construction. Washington is constantly using the logic of politics and zero-sum games to subtract the big development of the AI era, and it is also subtracting the development of Nvidia, while Nvidia is pragmatically using market forces to add.
As a victim of the U.S. export control policy, Nvidia should continue to work with other U.S. technology companies to exert pressure and influence on Washington in various ways to cancel policies and measures that violate international principles and rules as soon as possible. The AI wave has arrived, and the world obviously needs a vision and concept that matches the arrival of this era, and what countries should pursue is how to promote the growth of the overall productivity level through fierce but beneficial competition, rather than using wrong or even contrary to fair policies to strengthen their monopoly position and attack potential competitors.
We welcome NVIDIA's participation in the competition in the Chinese market, and we believe that the Chinese market is sufficient to accommodate NVIDIA and more innovative Chinese companies. The road ahead will be wider and narrower, depending to a certain extent on whether we can establish a sustainable and benign relationship with the Chinese market. Attitude towards the Chinese market will also determine whether NVIDIA can become a truly leading company in the AI era. ▲
February** Dynamic Incentive Program