The potential expansion of U.S. restrictions on Nvidia's chip sales to China has stirred investor concerns, particularly regarding the company's H20 chips, which are integral to AI software development in the Chinese market. This development follows reports that Chinese AI startup DeepSeek has been utilizing Nvidia's H20 and H800 chips for its new large language model, intensifying the focus on Nvidia's operations in China. The uncertainty surrounding these potential regulatory changes has led to a notable decline in Nvidia's stock, as investors weigh the implications of restricted access to a key growth market.
The Direxion Daily NVDA Bear 1X Shares (NVDD) ETF, which inversely tracks Nvidia's performance, rose 2.02% to $6.56 as of 5:00 PM on Wednesday, January 29.