The artificial intelligence wars have begun, so perhaps it's no surprise that the U.S. is moving to restrict the sale of so-called AI chips to China.
Many tech leaders and government officials have cited artificial intelligence as the most important emerging technology and some believe that it could prove even more disruptive than the internet. Just as the space race once defined the rivalry between the Soviet Union and the U.S., the AI race might define the competition between America and China, according to technopedia.com.
AI chips are optimized specifically for artificial intelligence development. AI programs require huge processing power. One of the most popular approaches to AI is Large Language Models, whose massive large data sets require exceptionally powerful chips. The average personal computer doesn't offer a fraction of the processing power needed to actually work with the data sets.
One chip that does power AI: the $40,000 Nvidia H100 AI Chip, which now falls under the the new export rules. Without access to these chips, China could struggle to keep up in the AI race. Meanwhile, Nvidia, a U.S. company, has emerged as a key player in the AI race.
In 2014, before AI applications exploded into the spotlight, Nvidia's shares sold for just over $5. In recent times, Nvidia shares have fetched more than $450 and the company is worth about $1 trillion, according to Statistica. With revenues hitting only about $27 billion in 2022, the sky-high valuation appears to be largely speculative and investors likely believe that Nvidia will remain a major player in the AI sector in the years to come.
