The United States has been tightening its grip on China's access to advanced technology for some time now. The latest crackdown this time concerns the export of powerful AI chips, specifically those from Nvidia, which has no competition in the field of artificial intelligence. With the White House tightening the rules, an important gateway to the Chinese market has been closed to Nvidia almost overnight.
You might be thinking, “Nvidia is still making billions, right?” But when the company announces it will lose $5,5 billion because it can’t deliver goods that Chinese customers have already ordered, it’s like a punch in the gut. The H20 chip, specifically designed to meet older export limits, now needs another special license. And that means stop.
Market reaction? Fast and ruthless
Wall Street doesn't play with emotions much. Nvidia shares immediately fell by almost 6% after the announcement. Investors are worried that similar steps may come in the future, and are starting to be cautious. And not only Nvidia, shares of AMD and other companies involved in AI chips also fell.
Nvidia expects to take $5.5bn hit as US tightens AI chip export rules to China | Nvidia | The Guardian https://t.co/F6X26Hd8Qz
— AlfredoCascer (@alfredocascer) April 16, 2025
But Nvidia isn't sitting in the corner and crying. On the contrary, the company announced that it plans to invest half a trillion dollars over the next four years to develop supercomputing AI infrastructure directly in the US. The goal? To have production and development under control, at home, without having to rely on complicated export routes.
With this move, Chinese companies like Alibaba, Tencent, and ByteDance are losing an important technology that has driven them forward. The H20 chip was supposed to be a compromise, powerful enough but still “within the rules.” Now it looks like they will have to find a different way, probably with their own chips or alternatives from other countries.
You could be interested in
This isn't just a technology problem. It's a geopolitical game where tech companies find themselves as pawns, even though they are giants themselves. The US is trying to stay ahead while China builds alternative paths. The result is tension, uncertainty, and sometimes financial turmoil, like right now with Nvidia.
So far, it looks like Nvidia will be able to pull it off. The company has a pretty strong position, innovation is coming naturally, and AI is still on the rise. But a loss of 5,5 billion is certainly no small blow. And the question remains whether it will be another manufacturer or another market next time.
