San Jose, CA — Shares of major tech companies slumped sharply this week following an announcement by Nvidia Corporation that new U.S. export restrictions on advanced AI chips could cost the firm a staggering $5.5 billion in revenue. The financial hit stems from new rules imposed by the U.S. Department of Commerce targeting the export of high-performance chips to China and other regions deemed sensitive to national security.
The latest export curbs are part of an ongoing push by the Biden and Trump administrations to limit China’s access to leading-edge semiconductors used in artificial intelligence (AI) and supercomputing—sectors considered strategic for economic and military dominance.
Nvidia, AMD, and Global Markets React
The new licensing requirements primarily affect Nvidia’s H20 AI chip and AMD’s MI308, along with similar advanced accelerators. Nvidia confirmed in a regulatory filing that these chips would now require special government approvals for international sale “for the indefinite future.”
On Wednesday, Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) both saw their stock prices tumble by nearly 6% during morning trading. AMD also warned of a potential $800 million charge due to inventory losses and purchase commitments tied to the export ban.
Broader Market Impact in Asia
Asian tech giants also took a hit:
- Advantest Corp. (Japan), a major chip-testing firm, dropped 6.7%
- Disco Corp. (Japan), a key chip equipment supplier, fell 7.6%
- Taiwan Semiconductor Manufacturing Company (TSMC) slipped 2.4%
These declines signal broader investor concern over the ripple effects of U.S.-China tech tensions on the global semiconductor supply chain.
Regulatory Pressure from U.S. Lawmakers
The renewed export restrictions came after pressure from U.S. lawmakers, most notably Senator Elizabeth Warren, who voiced concern that the Commerce Department had paused earlier plans to limit chip exports. In a strongly worded letter, Warren warned against the strategic threat posed by China’s access to AI-grade semiconductors like the H20.
The restrictions now aim to prevent these chips from being used in Chinese supercomputers or for military-affiliated AI research. The backdrop for these restrictions includes the rise of DeepSeek AI, a Chinese chatbot and language model whose emergence has raised eyebrows in Washington.
Nvidia Doubles Down on U.S. Manufacturing
Despite the financial hit, Nvidia is ramping up its U.S. presence. On Monday, the company announced plans to build and test its next-gen AI supercomputers domestically, commissioning over 1 million square feet of manufacturing space in Arizona and Texas. These facilities will focus on the production of Nvidia’s Blackwell chips, a high-performance line expected to power future AI infrastructure globally.
According to Nvidia, this domestic investment could support up to $500 billion worth of AI infrastructure over the next four years—an effort applauded by President Donald Trump, who framed the move as a win for his administration’s pro-manufacturing agenda.
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