Tech war: US sanctions on key Nvidia distributor in China could push more customers towards domestic replacements
- Sitonholy, which has been added to the US Entity List, is one of a few ‘elite-level’ Nvidia data centre product solutions providers in China
- The company has also been distributing Huawei Technologies’ Ascend 910B AI chips, an alternative to Nvidia’s A100 GPUs
Chinese companies have lost access to one of the country’s largest distribution channels for Nvidia processors after the US added a major reseller to its export blacklist, strengthening Washington’s efforts to curb artificial intelligence (AI) development in China while pushing more Chinese businesses towards local replacements.
The firms were “involved with providing AI chips to China’s military modernisation programmes” and military intelligence users, Kevin Kurland, an export enforcement official at the US commerce department, said at a Senate subcommittee hearing, according to a Reuters report.
In a statement, the Chinese commerce ministry called the US sanctions “abusive” and “a weaponisation” of export controls.
Sitonholy is one of a few “elite-level” Nvidia data centre product solutions providers in China, having retained its franchise rights for being able maintain strong sales year after year, according to people with direct knowledge of the matter who declined to be named because they are not authorised to speak to the media.
While Nvidia has been banned by the US from exporting to China its advanced A100 and H100 data-centre graphics processing units (GPUs), which have become sought-after for AI training, it has come up with new replacements for China-based clients, such as the H20, L20 and L2 GPUs.
