Nvidia Corp
Thousands of Nvidia's gaming cards are dismantled monthly, with core components installed on new circuit boards.
This workaround addresses the shortage of high-end processors in China, although these repurposed chips lack the precision for training some large AI models.
The Biden administration's tightened export controls have significantly impacted Nvidia's ability to sell advanced semiconductors to China, the Financial Times reports.
Demand for these repurposed gaming chips has spiked, with one factory manager reporting over 4,000 disassembled cards in December.
The primary buyers are public enterprises and small AI labs lacking sufficient Nvidia server chips.
However, industry experts caution that such modifications could violate Nvidia's intellectual property rights, and gaming cards like the GeForce RTX 4090, known for repurposing, are now restricted in China.
Nvidia released a slower version of its gaming cards, the GeForce RTX 4090 D, to comply with U.S. regulations, yet its performance may be insufficient for large AI models.
Nvidia maintains that gaming cards are unsuitable for AI data center clusters.
The company has developed three new chips for China that align with U.S. export controls but offer reduced performance and are priced similarly to their more powerful predecessors.
This situation leaves Chinese firms with limited alternatives, some resorting to less expensive Nvidia gaming chips for temporary solutions.
Previous reports indicated Nvidia's most significant global customers, Alibaba Group Holding Limited
Chinese cloud companies sourcing about 80% of high-end AI chips from Nvidia could curtail orders by 50%-60% within five years.
Nvidia stock gained over 234% thanks to the AI frenzy, beating the broader index SPDR S&P 500
Price Action: NVDA shares traded higher by 2.11% at $542.62 on the last check Wednesday.
