Nvidia (NVDA) stock fell 4.5% Monday after a report from Reuters said Chinese tech giant Huawei is set to begin shipping advanced AI chips as soon as next month in the wake of Trump’s export rules effectively banning Nvidia’s sale of its H20 chips in China.
Huawei’s new 910C chips are reportedly competitive with Nvidia’s H100 AI chips, which are two generations behind its latest Blackwell chips. The US government banned the export of H100 GPUs (graphics processing units) to China in 2022.
Though Nvidia has adaptedto multiple new US trade rulesby creating chips specifically for the Chinese market, the ever-tightening restrictions mean those chips are far less powerful than their mainstream counterparts.
The report of the latest Huawei chip comes nearly one week after Nvidia said the US government had effectively banned sales of its H20 graphics processing units — a version of its H100 AI chips made for Chinese consumers to comply with US trade rules.
The House Select Committee on China also released a statement saying it was “demanding answers” from Nvidia about whether it had previously complied with trade restrictions.
Fellow chip stocks Broadcom (AVGO) and Advanced Micro Devices (AMD) also dropped Monday, falling 2.8% and 2.2%, respectively.
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Nvidia disclosed last week that it will record a $5.5 billion hit from lost inventory and contracts in the first quarter due to the change in trade policy. JPMorgan analyst Harlan Sur projected that, overall, Nvidia will lose as much as $16 billion in the current fiscal year from the H20 ban.
Bernstein analyst Stacy Rasgon said last week in a note to investors following the news: “Banning the H20 makes little sense to us … a ban essentially simply hands the Chinese AI market over to Huawei.”
China accounted for $17 billion, or 13%, of Nvidia’s revenue in its fiscal year 2025, Rasgon noted.
Shares of Nvidia fell 7% the day after the restriction was announced. The company saw roughly 8%, or $230 billion, erased from its market cap last week.
Nvidia CEO Jensen Huang visited China and met with trade officials in Beijing last week, and the company is simultaneously looking to expand its domestic manufacturing footprint, pledging $500 billion to the US AI supply chain buildout last week.
Read more: The latest news and updates on Trump’s tariffs
Nvidia has said it follows trade rules “to the letter,” and the company was critical of tightening US trade policy under the prior administration.
When former President Joe Biden passed the AI Diffusion rule — which is set to go into effect in May, caps AI chip exports on a country-by-country basis, and limits US companies’ data center expansion abroad — Nvidia essentially argued that tighter rules would only bolster foreign competition.
“Rather than mitigate any threat, the new Biden rules would only weaken America’s global competitiveness, undermining the innovation that has kept the U.S. ahead,” Nvidia vice president of government affairs Ned Finkle wrote.
Trump set the stage for tariffing semiconductors last week by opening a probe into US exports of the products. The president has promised that most electronics will still get wrapped up in his tariffs, which could hurt Nvidia and other Big Tech firms.
“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” he posted last week on Truth Social.
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