The U.S. government has imposed restrictions on the sale of Nvidia’s high-performance compute GPUs to certain countries, including the Middle East, in an effort to hinder China’s AI development. The export license requirement aims to prevent the GPUs from being resold to China. Nvidia has developed alternative products with reduced performance to comply with the restrictions and continue sales in China. The specific countries in the Middle East impacted by these controls have not been disclosed. The concern is that Nvidia’s GPUs could be diverted from the Middle East to China, and the U.S. is also worried about Chinese companies training AI models overseas and bringing the technology back to China. Despite the restrictions, Nvidia states that its revenue is not significantly affected, and the company is working with the U.S. government to address the issue.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| U.S. government restricts sales of Nvidia GPUs | Restriction on sales to certain countries | Greater control over AI technology distribution | Thwarting China’s AI development |
| Middle East countries impacted by restrictions | Limitation on access to high-performance GPUs | Shift in AI technology supply chains | Concerns over technology diversion to China |
| Saudi Arabia and UAE strengthening AI prowess | Increased focus on AI development | Greater investment and collaboration in AI | Desire to advance AI capabilities |
| U.S. concern over technology diversion to China | Efforts to prevent Chinese AI development | Stricter regulations and controls on technology | Protecting domestic AI industry and capabilities |
| Nvidia working with U.S. government | Collaboration to address licensing issue | Resolution of licensing requirements | Maintaining business operations and revenue streams |