Once a challenger to Nvidia, British semiconductor company closes in China

The cause is believed to be the latest US export restrictions on artificial intelligence ( AI ) and data center chips.

“Recently updated US export controls mean that Graphcore and other AI hardware manufacturers can no longer sell products in the Chinese market,” a company representative said.

The company's top products are all on the new restricted list issued by the US Department of Commerce.

Graphcore, which has been headquartered in Beijing since 2019, did not detail the number of staff cuts in China.

0a0fa79f 5676 4f49 8076 14a9c2b682d3 c792c43b.jpeg — Graphcore is the darling of the British semiconductor industry.

This is the latest setback for the company considered the "darling" of the British semiconductor industry, once even considered a challenger to the giant Nvidia.

Founded in 2016 in Bristol, England, the company was valued at $2.8 billion in 2020 after a $222 million funding round.

However, Graphcore saw revenue decline 46% in 2022, with a loss of $204.6 million for the year, according to its latest financial report in October 2023.

The company said it needs additional funding to continue operations but has not announced any new funding rounds.

Hardly any advanced chipmaker has escaped the negative impact of US chip export restrictions on China, which have escalated in recent years.

Nvidia, the world's largest semiconductor company by market capitalization, said it plans to customize new AI chips for Chinese customers, but the process will take time because it needs to create chips that meet those customers' requirements without violating export rules.

Meanwhile, local tech companies such as Alibaba Group Holding and Tencent Holdings have warned that the restrictions will impact their cloud computing businesses.

Last week, Alibaba withdrew plans to independently list its cloud unit.

e0ffd350 e45b 4574 9c90 0a60cc07547e 480567be.jpeg — Nvidia now expects sales to China and other restricted markets — which have contributed 20 to 25 percent of its data center revenue in the past few quarters — to “decline significantly” in the fourth quarter.

Nvidia's forced shrinking of its product portfolio in China has forced local tech giants to source locally from domestic chipmakers.

Reuters reported in August that Baidu placed a $61 million order for Huawei Technologies' Ascend 910B AI chip.

Meanwhile, information about the RTX 4090, one of Nvidia's most popular and high-end gaming graphics cards, has been removed from its official website for the Chinese market.

Nvidia did not give a reason for the change. Currently, the GeForce RTX 40 series homepage only has entries for the 4080, 4070, and 4060 models.

SCMP said that the supply of VGA 4090 in China is tightening as the US sets higher standards for exporting advanced graphics chips (GPUs) to the world's second largest economy.

Several of Nvidia's major hardware partners in China, such as AsusTek Computer, Micro-Star International, and Colorful Technology, also removed information about the RTX 4090 VGA from their online stores on e-commerce platforms Tabao and JD.com.

The RTX 4090 is still available through unofficial retailers and the black market, with one seller on JD.com selling it for as much as 22,894 yuan ($3,194).

In its October export policy update, the US Department of Commerce also created exceptions to minimize the impact on the consumer market for certain types of AI chips.

The 4090 and RTX 6000, despite having total processing performance above the 4800 threshold, were not designed or marketed as data center GPUs, and should have qualified for the exception.

However, both are now listed alongside a series of banned datacenter GPUs like the Nvidia H100, A100, H800, and A800.

According to an anonymous engineer at Autra Technology, a developer of L4-level autonomous trucks (without active driver intervention), in China, the RTX 4090 is not just a gaming card, but can be used for many other tasks, such as running “self-awareness” features on autonomous vehicles.

Nvidia has developed three new data center GPUs for Chinese customers after its previous two chips were banned from export, but the first shipments are not expected until late December.

Prices of H800 and A800 chips have increased by 40% compared to a month ago on the mainland.

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