Nvidia Stock Drops on United States Export Ban
Sep 1, 2022 By MarketDepth
Nvidia (NVDA:NYQ) shares plummeted on news that the United States is banning the export of some advanced AI chips to China. This ban will hit all major tech companies involved in Cloud or AI technologies.
The company stated that U.S. officials instructed them to immediately restrict the export of the top two AI chips to China. Advanced Micro Devices announced they were told new licensing was required to prevent export of AI chips.
Nvidia shares are down 11% intraday on the news dragging many other tech companies along with it. AMD is also down 6% on the day.
As tensions worsen between US and China, we see more restrictions being set in place. The worst case scenario would be an increased set of rules which would prevent Taiwan from designing or manufacturing chips for Chinese companies.
Some of the largest companies in China, including Alibaba, Tencent, Baidu and Huawei, will feel the pinch and look for alternatives to the performance chips set in the ban. With limited options, they will need to opt for lower-performance chips or rely on cloud companies such as Alphabet and AWS.