The chipmaker, whose graphics processing units (GPUs) are considered the backbone of the AI boom, has seen a meteoric rise over the past few years, becoming the most valuable company in the world and the first to cross the $4 trillion threshold.
However, as the U.S. and China compete for control, its chips have become a key target, creating a complex balancing act for the firm.
“They’re doing a spectacular job of walking that tightrope right now,” said Stacy Rasgon, a senior analyst at Bernstein Research.
“I hope they can stay up on the rope,” he added, praising CEO Jensen Huang for “doing a really good job of balancing what are some fairly opposing concerns from both sides. He’s been doing a good job of walking that line.”
Nvidia’s chips have become highly sought after, as companies and countries alike race to develop AI. This has also made the chips a key chokepoint, as the U.S. seeks to limit China’s abilities to develop the technology.
“The entire chip industry has been having to learn how to reengage with Washington after a couple of decades in which the products they sold weren’t seen as particularly politically sensitive,” said Chris Miller, an international history professor at Tufts University.
“Over the past decade, that’s changed dramatically,” he continued.
While Nvidia isn’t the only chipmaker facing restrictions, it sits in a unique position as the dominant market player.
“Nvidia’s the one that’s supplying the bulk of the merchant AI infrastructure that everything’s running on. Clearly, it’s imperative everywhere and probably doubly so in China,” Rasgon said.
“To the extent that China’s been building out their AI infrastructure, largely they’ve been building it out or desiring to build it out on Nvidia,” he added.
Check out the full report at TheHill.com.
