Nvidia is under serious pressure after the U.S. government imposed new export restrictions on its H20 chip, halting shipments to China. This decision is part of a broader national security push to limit advanced semiconductor technology access in China, with fears that such AI chips could support military supercomputing projects. The result? Nvidia’s value just took a hit.
The H20 chip had become a major asset in Nvidia’s Chinese business, generating over $12 billion in 2024 alone. With around a million units shipped, it was one of the few tailored solutions compliant with earlier restrictions. But now, that revenue stream has been frozen. The company expects a $5.5 billion loss in the first quarter, sending shockwaves through the market.
As expected, Nvidia’s stock didn’t take the news lightly—falling roughly 6% after the announcement. Meanwhile, China is doubling down on promoting domestic alternatives like Huawei and Cambricon, urging tech firms to pivot away from U.S. chips. The geopolitical tug-of-war around AI tech is not cooling down any time soon.
In an effort to adapt, Nvidia is investing in domestic infrastructure with partners like TSMC, aligning with U.S. ambitions to localize semiconductor production. Whether these moves will make up for the losses in China remains to be seen, but the AI chip war just escalated again.
#Nvidia #H20chip #AIexportban #USChina #semiconductors #technews #geopolitics