The Six Five team discusses rumored NVIDIA B20 for China.
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Transcript:
Daniel Newman: Pat, let’s talk about NVIDIA B20.
Patrick Moorhead: Yeah. We don’t typically talk about rumors unless they go into the talk track stuff we’ve talked about before. But a lot of things happened over the last couple of weeks. I did two broadcast TV appearances to talk through NVIDIA, and things like China, but if you recall, there were some comments that Biden made, and Trump made about Taiwan, and that sent a lot of the stocks crashing that were related to TSMC. TSMC came out with just an amazing earnings report that we covered on the last pod, but here we are. The State Department has put export controls, this was about 18 months ago, a decree that’s saying, “Hey. If your GPU density, performance density, and total performance is in with a certain matrix, you have to ask for permission to be able to sell it. Hey. If it’s in the green, you don’t need to ask us. If it’s in the red, which is called the License Zone NAC-Ineligible, don’t even try. Don’t do this.”
And there were rumors that NVIDIA was doing this on a prior series, which I wrote an analysis on, that takes you through all the limit, and the process that the Commerce Department goes through, but net net the rumor is a cut down Blackwell 200, a B200 called the B20 that fits into this green or yellow area where NVIDIA would need permission to sell that inside of China. So a lot of different conversations going on around there. I believe this is likely true, and I don’t believe that NVIDIA is trying to skirt some export law out there. They’re a smart company. They’re not dumb. They’re not going to try to skirt this stuff. Now there’s a lot of stuff coming in through the back door. I’ve made this comment. H100 is about the size of a carton of cigarettes, and you can very much easily bring that into to China through about a zillion different ways. Again, NVIDIA is not condoning this, but there’s no way to phone home to know that it’s being used in China. So I think it would be a positive sign for NVIDIA to be able to do that. Keeps NVIDIA still in the game in China, because the last thing you want is the indigenous companies like Huawei who has a capable accelerator out there. And this, by the way, none of this is unique to NVIDIA. AMD and Intel have to abide by all of these rules.
Daniel Newman: Yeah. Pat, China’s a massive market. Every one of these companies would be foolish to not be thinking about how to build a product to support the interests of Chinese companies that want to benefit from AI. It’s a fine line, because it’s like not every company in the US is affiliated with our government, and not every business in China is affiliated with the Chinese National or Communist Party that runs the country. And the reason I point that out is because I think we conflate those things sometimes. The controls have to do largely with defense-related items, where they don’t want them to get the most powerful compute capabilities that could be used in some way, both for actual defense and military activities, as well as what I would call hacking, and cyber, and other things that powerful AI chips could do to create chaos. Having said that, there’s businesses in China like there are here in the United States that are banks, that are healthcare organizations, that are manufacturing, that want to build next generation technologies with AI, and they need GPUs to do it. And not having access to the China market is an incredible miss for any of these companies. And of course, NVIDIA with its current positioning wants to get in, seed the market, win customers, get them on NIMs, get them on CUDA, do it now. Seriously, do it now though-
Patrick Moorhead: No. I’m smiling, because that’s a really, really good point.
Daniel Newman: … while it’s red-hot. Once they’re in, what we do know is once this market has been seeded, the unseeding, in our data showing almost 93% enterprise GPUs are NVIDIA. And the bottom line is that if NVIDIA doesn’t mess up, no one’s going to leave the platform. They’re going to keep writing code to NVIDIA hardware. And literally at this point, if NVIDIA doesn’t mess up, and now can seed one of the other biggest economies in the world, it just puts them in the driver’s seat for the long term. And by the way, that leaves Intel, AMD, all these companies building accelerators, the Cloud instances, about 7% of the market to go fight after. Now the market will get bigger, but everything else is going to be really hard work. You did a good job on Yahoo Finance, Pat, when you went on, and talked about this. I thought it was a good overall perspective, but that’s mine. Got to go get that market. Foolish not to. And to your point, one other thing is export controls aren’t stopping gray market. Never have, never will. Just being candid.
Patrick Moorhead: Dude, I remember I was at AMD in 2001. I know we’ve got 20 minutes and 3 topics, but there were export controls into Iran, and there was a picture on the front of the USA Today Business, and in the background was an AMD chip in a box, a bunch of processors in a box that were basically banned from Iran.
Daniel Newman: Oh. Yeah. This is the thing. It just is what it is. You would think with things like blockchain, and other technologies, this stuff could be tracked. But I also have said to a certain extent in history, Pat, this isn’t a weird conspiracy theory or anything, but I just don’t know that people want to. It’s like we don’t really need cash anymore, but I think there’s just these some odd reasons that we actually want to have the ability to buy things, and have no one know about them. It’s the way the world goes. Right.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
