Nvidia and AMD warned that new export restrictions on the Department of Commerce’s computer chip could cost billions of dollars.
Nvidia said the new regulations will be hit by a $5.5 billion bill. Although major chip makers can apply for export licenses, there is no guarantee that they will be granted. This means you could lose in a critical market.
Rival Chip Giant AMD said that exporting MI308 products to the country could result in charge of up to $800 million in “stock, purchase commitments and related reserves.” According to SEC submission.
Shares of NVIDIA and AMD had plummeted to 9.9% and 9.9% respectively by 3:20pm ET on Wednesday. The White House announced Tuesday it would require new licensing requirements.
The stricter rules on semiconductors are the Trump administration’s latest move to prevent sophisticated chips from heading towards China, preventing the nation from building strong supercomputers and moving ahead in the AI race.
“The Commerce Department is committed to acting on the President’s directive to protect our national and economic security,” a department spokesperson said in a statement.
Dow Jones Industrial Average slid 912 points (2.3%) on Wednesday, with the S&P 500 and Nasdaq down 3.1% and 4.3%.
Stocks were being rebounded a week after a volatile trading as President Trump travelled back and forth between tariffs, announced hard taxes, suspending for 90 days, shocking investors.
The White House has temporarily reduced all other tax rates to 10% as the administration is negotiating with several countries.
However, warnings from Nvidia and AMD sent the stock in another decline as losses could hit the business significantly.
The H20 is an AI chip designed to pass stricter US export restrictions enacted under the Biden administration in 2022. The chip is slower and has less bandwidth than the H100 and H200 models sold in the US, but it rivals high-performance AI graphics processing units.
China’s Deepseek, which rattled the industry giants and markets with the launch of a competitive AI model earlier this year, used the H20 chip in its research.
Chip generated an estimated $12 billion to $15 billion in revenue last year, with Chinese companies, including Tencent, Alibaba and Baitedan, who own Tiktok, bolstering orders to keep up with demand after Deepsyk’s Rooon debut.
Nvidia reportedly recognized the next export rules last week, but did not warn some of its key customers in advance, a source familiar with the matter told Reuters.
Nvidia declined to comment.
Nvidia had secured H20 orders worth $18 billion since the beginning of this year, according to the report. The H20 is the main chip legally permitted to sell to Chinese customers.
The latest chip export curbs could encourage Chinese companies to buy chips from local competitors like Huawei.
Meanwhile, the costs of US chipmakers are expected to soar due to Trump’s sweeping tariffs.
According to industry calculations discussed with White House officials, new taxes could cost semiconductor equipment manufacturers more than $1 billion a year, according to Reuters reports.
The three largest manufacturers of chip equipment in the United States, Applied Materials, LAM Research, and KLA, could lose about $350 million a year, sources said.
Small rivals could be slapped at tens of millions of dollars extra costs.
With post wire
