President Donald Trump Just Dealt a Jarring Blow to Nvidia. Can the Artificial Intelligence (AI) Chip King Recover and Reclaim Its Previous Highs?
Things have gone from bad to worse this year for the artificial intelligence (AI) chip king Nvidia (NASDAQ: NVDA). It all started with the emergence of DeepSeek, a Chinese start-up that used less advanced Nvidia chips to build a chatbot that could rival OpenAI's ChatGPT, supposedly at a fraction of the cost. This made some investors question what AI infrastructure spending might ultimately look like at a time when valuations across the industry were sky high.Then, Nvidia had to deal with the threat of tariffs since the company sources a lot of its chips from Taiwan. Although Trump has excluded semiconductors from his tariffs, the administration just dealt another blow to Nvidia stock.On April 15 after the market close, Nvidia disclosed in a filing that the U.S. government had informed the company it would need to obtain a license to export its H20 chips to China, including Hong Kong and Macao. The government told Nvidia the purpose of this restriction is to prevent China from obtaining parts it could use to build a supercomputer. As a result, Nvidia said it expects to take a $5.5 billion charge in its fiscal 2026 first quarter due to H20 chip inventory, purchase commitments, and associated reserves.Continue reading
Things have gone from bad to worse this year for the artificial intelligence (AI) chip king Nvidia (NASDAQ: NVDA). It all started with the emergence of DeepSeek, a Chinese start-up that used less advanced Nvidia chips to build a chatbot that could rival OpenAI's ChatGPT, supposedly at a fraction of the cost. This made some investors question what AI infrastructure spending might ultimately look like at a time when valuations across the industry were sky high.
Then, Nvidia had to deal with the threat of tariffs since the company sources a lot of its chips from Taiwan. Although Trump has excluded semiconductors from his tariffs, the administration just dealt another blow to Nvidia stock.
On April 15 after the market close, Nvidia disclosed in a filing that the U.S. government had informed the company it would need to obtain a license to export its H20 chips to China, including Hong Kong and Macao. The government told Nvidia the purpose of this restriction is to prevent China from obtaining parts it could use to build a supercomputer. As a result, Nvidia said it expects to take a $5.5 billion charge in its fiscal 2026 first quarter due to H20 chip inventory, purchase commitments, and associated reserves.