Over allegations of illegal export of Nvidia's sophisticated processors to China, the U.S. Department of Commerce has started an investigation on Nvidia (NVDA, Financials) and Super Micro Computer (SMCI, Financials). The investigation seeks to find how these chips avoided strict export restrictions meant to protect national security.
Under inquiry are other Nvidia partners like Dell Technologies (DELL, Financials). Allegations of several distributors either duplicated serial numbers on servers or altered them to hide illegal shipments have emerged. Nvidia has underlined again its adherence to export limits and blasted any illegal sales as detrimental to its company.
Given their strategic relevance for artificial intelligence applications, the Biden government has stepped its efforts to limit the export of high-performance GPUs to China. The government has added 140 more organizations to the list of restricted entities Notwithstanding these regulations, resellers have apparently enabled chip purchases by Chinese companies.
Stock of Nvidia has seen swings in response to these events. Following a November record high, shares have declined almost 15%. On Thursday, they closed at $131.85. On Friday, the stock is up 2.2% on last look, changing hands for $131.77. Analysts have advised investors to keep an eye on possible indicators of recovery and point out more negative possibilities.
Nvidia keeps innovating as well. Recently, the firm unveiled the Jetson Orin Nano Super Developer Kit, a small supercomputer costing $249 with 70% quicker generative artificial intelligence capability than its predecessor. Furthermore ready for release are next-generation RTX 50-series graphics cards from Nvidia, allegedly with revolutionary neural rendering technologies.
Given Nvidia's strong market presence in other countries, the research is likely to have wide effects on its worldwide operations. Regulators and investors will be especially keenly observing Nvidia's adherence to compliance standards and capacity to maintain technical leadership as regulatory scrutiny sharpens.
