Background and Measures
Tightened Export Restrictions: The US government has tightened the export rules for AI chips from Nvidia to China, meaning that even the stripped-down version of the H20 chip designed for the Chinese market now falls under stricter licensing. The main reason for these tightened rules is the risk that the affected products could be used in a supercomputer in China, which the US government sees as a threat to national security.
Impact on Nvidia
Financial Burdens: Nvidia expects burdens of up to $5.5 billion due to the tightened export restrictions, primarily arising from inventory and purchase commitments. Nvidia’s stock price fell significantly following the announcement of the tightened export rules, with losses of up to 10% in one day. Nvidia’s market value dropped by about $180 billion to $2.7 trillion.
Reactions and Strategies
Production Plans in the USA: Despite the challenges, Nvidia plans to produce AI technology worth up to $500 billion in the USA over the next four years. Two supercomputer factories are to be built in Texas for this purpose. The Swiss bank UBS has maintained its “Buy” rating for Nvidia with a target price of $185, as it considers the long-term impact of the export restrictions to be limited.
Market Reactions and General Impacts
Chinese Companies: Chinese companies like ByteDance, Alibaba, and Tencent have already ordered H20 chips worth at least $16 billion in the first quarter of 2025, exceeding Nvidia’s production capacity. The tightened export rules could affect the tech sector as a whole, impacting the global supply chain of AI chips and potentially leading to a redistribution of market shares.
In summary, the tightened export rules represent a significant challenge for Nvidia; however, this may be mitigated by the company’s strategic realignment and strong market positioning. Private investors should keep an eye on the long-term effects on the tech sector and global economic development.