Tech shares fall after Nvidia says new US controls on exports of AI chip will cost it $5.5 billion
Tech shares fall after Nvidia says new US controls on exports of AI chip will cost it $5.5 billion
BANGKOK (AP) — Shares in computer chip makers slumped early Wednesday after Nvidia said tighter U.S. government controls on exports of computer chips used for artificial intelligence will cost it an extra $5.5 billion.
The company, which announced Monday that it will produce its artificial intelligence super computers in the United States for the first time, said the government told it that its H20 integrated circuits and others of a similar bandwidth would be subject to the licensing requirements for the “indefinite future.”
In a regulatory filing, it said the government said the controls addressed risks that the products “may be used in or diverted to, a supercomputer in China.”
Nvidia’s shares fell 5.8% in pre-market trading. Shares in rival chip maker AMD dropped 6.5%.
Asian technology giants also saw big declines. Testing equipment maker Advantest’s shares fell 6.7% in Tokyo, Disco Corp. lost 7.6% and Taiwan’s TSMC dropped 2.4%.
The news of the new controls came after Sen. Elizabeth Warren urged Commerce Secretary Howard Lutnick to impose restrictions on exports of Nvidia’s H20 and other advanced AI chips to China.
“I write with great concern regarding reports that the Commerce Department has paused its plan to restrict the export of powerful advanced AI chips like Nvidia’s H20 to the People’s Republic of China (PRC),” Warren wrote in a letter posted on the website of the U.S. Senate’s Committee on Banking, Housing and Urban Affairs.
It said former President Joe Biden had not included the H20 chips in controls his administration placed on exports of advanced AI chips.
The emergence of China’s DeepSeek AI chatbot in January renewed concerns over how China might use the advanced chips to help develop its own AI capabilities.
Commerce Department officials were not immediately available for comment early Wednesday.
Nvidia said Monday it has commissioned more than one million square feet of manufacturing space to build and test its specialized Blackwell chips in Arizona and AI supercomputers in Texas — part of an investment the company said will produce up to half a trillion dollars of AI infrastructure in the next four years.
The announcement came after President Donald Trump and other officials said tariff exemptions on electronics like smartphones and laptops were only a temporary reprieve until officials develop a new tariff approach specific to the semiconductor industry.
Trump claimed Nvidia’s decision as a victory for his effort to expand manufacturing in the U.S.
By ELAINE KURTENBACH
AP Business Writer
