Nvidia is facing pressure as reports emerged on January 29th that the Trump administration is considering further restrictions on the sale of its chips to China. The discussions, which are still in the preliminary stages, focus on potentially expanding existing curbs to include Nvidia's H20 chips. These chips, designed specifically for the Chinese market, are used in developing artificial intelligence software and services. The news comes after Chinese AI startup DeepSeek revealed it used Nvidia's H20 and H800 chips to train its new large language model, which has already caused significant ripples in the tech sector.
The potential for tighter export controls has raised concerns about Nvidia's ability to maintain its market presence in China, a key region for its growth strategy. An Nvidia spokesperson indicated the company's willingness to collaborate with the administration as it navigates its AI policy approach. However, the uncertainty surrounding these potential restrictions has already impacted investor sentiment.
Nvidia's stock closed at $123.7 on January 29th, down 4.1% from the previous day's close of $128.99, reflecting the market's apprehension over the potential impact of these regulatory changes.