The effect of US tariffs, particularly on China, are having ever wider implications. This article looks at how Nvidia, one of the most important GPU designing manufacturing companies, is being drastically affected by this trade war.
- Nvidia shares plunged after the company announced a $5.5 billion drop due to new US export rules to China.
- The US government is tightening export licenses for Nvidia’s H20 AI chip to China, a previously popular product.
- This is part of the escalating trade war between the US and China.
- Nvidia stated the license requirement aims to prevent the chips from being used in Chinese supercomputers and will be in place indefinitely.
- Analysts believe the financial impact is significant but Nvidia can likely absorb it, with some suggesting it could be a negotiating tactic.
- Chips are a key battleground in the US-China race for tech dominance.
- Experts anticipate a potential “fully decoupled” AI semiconductor supply chain between the US and China if the restrictions persist.
- Nvidia’s $5.5 billion charge relates to inventory, purchase commitments, and related reserves for H20 products.