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Nvidia falls to lead chip stocks lower as US clamps down on key AI exports to China

Nvidia falls to lead chip stocks lower as US clamps down on key AI exports to China
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Nvidia president and CEO Jensen Huang holds a graphics card NVIDIA 4060Ti and a laptop at a keynote presentation at Computex, or the Taipei International Information Technology Show, on May 29, 2023.
Nvidia president and CEO Jensen Huang holds a graphics card NVIDIA 4060Ti and a laptop at a keynote presentation at Computex, or the Taipei International Information Technology Show, on May 29, 2023.

Walid Berrazeg/Getty Images

  • The US announced further constrictions of AI chip exports, making it harder for companies to sell those products to China.
  • Nvidia, Intel, and other chip-related stocks all dropped in Tuesday trading.
  • Nvidia fell as much as 6%, before regaining some of its losses around midday.

Shares of Nvidia dropped in Tuesday trading, leading a handful of other chip-related stocks lower, after the US announced fresh restrictions on exports for artificial-intelligence chips.

Nvidia stock had dropped as much as 6% before paring those losses to about 3.5%. AMD dropped as much as 3% and Intel also fell roughly 3%, though both regained ground near midday in New York. The PHLX Semiconductor Index retreated around 2% before rebounding.

Early Tuesday, the Commerce Department said it would clamp down on AI chip exports, further cutting into Nvidia and Intel’s ability to sell existing or new products in China.

The latest move is intended to close off loopholes from last year’s export controls that had raised tensions in the ongoing US-China trade battle. 

Commerce Secretary Gina Raimondo said the US aims to curtail China’s “access to advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers.”

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The US-based Semiconductor Industry Association disagreed, saying it recognized the need to address national security concerns, but that the latest policy decision isn’t conducive to a healthy semiconductor sector.  

“Overly broad, unilateral controls risk harming the U.S. semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere,” the group said in a Tuesday statement. “Accordingly, we urge the administration to strengthen coordination with allies to ensure a level playing field for all companies.”

Read the original article on Business Insider

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