Nvidia Shares Fall as US Export Controls Cost $5.5B

Post by: Pratik Kumar

Photo : Reuters

Shares in Nvidia and other companies that make computer chips dropped a lot after Nvidia said new rules from the U.S. government would cost it an extra $5.5 billion. These new rules limit how Nvidia can sell chips used for artificial intelligence (AI).

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Nvidia, which announced on Monday that it would start making AI supercomputers in the United States, said the U.S. government told them that their H20 chips and other similar chips would be under these new rules for an unknown amount of time. The government said the rules were to make sure these chips wouldn't end up in supercomputers in China.

Because of this, Nvidia's shares dropped by 6.3% after the regular market closed. Other companies that make chips also saw their stock prices drop. For example, AMD's shares dropped by 7.1%. In Asia, companies like Advantest, Disco Corp., and Taiwan's TSMC also saw their shares fall.

Before this, there were reports that the U.S. government was not going to put as many rules on the H20 chip. But government officials didn’t comment on the situation right away.

In addition to this, Nvidia said it has already started to build new spaces in Arizona to make and test its special chips. They are also working on AI supercomputers in Texas. Nvidia said they plan to invest a lot of money, which will help create many new AI tools in the next four years.

This comes after U.S. leaders, including former President Donald Trump, said that the country might change how it taxes things like smartphones and computers. A new plan for this will be made soon, and it may affect the computer chip industry.

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