From Fortune:

Nvidia faces a dilemma as the Biden administration worries about the security risks of their chips being sent to China. The chipmaker is in a difficult position, trying to comply with U.S. regulations while still engaging with the second-largest economy in the world.

Four car makers, including Li Auto and Xiaomi, have chosen Nvidia’s DRIVE technology for their automated driving systems, a significant boost for the tech company in the auto industry.

In response to U.S. export restrictions, Nvidia is planning to start mass production of semiconductors for the China market later this year. This is not the first time the company has had to change its products to comply with U.S. regulations.

CEO Jensen Huang has warned against U.S. rules, saying they may encourage China to build its own chips. Nvidia has seen a decline in sales in countries affected by export controls, including China, which the company expects to be a significant decline in revenue.

Chinese companies are turning to local chipmakers for their processors, concerned about the downgraded processors from Nvidia and the possibility of more U.S. restrictions in the future.

Local chipmakers in China are pitching their own chips as a safer alternative to Nvidia’s downgraded processors, capitalizing on fear of tightened restrictions from the U.S. and concerns about reduced performance compared to Chinese-made chips.



Read more: Nvidia announces new China EV partnerships on automated driving