Chip designer NVIDIA Corporation's shares failed to catch a break today and fell immediately after a fresh report from Bloomberg claimed that the Trump administration was discussing levying additional export control restrictions on the firm's GPU sales to China. NVIDIA's GPUs are among the most prized commodities in the world, and they were at the heart of the trillion-dollar wipeout on Wall Street on Monday that stunned investors and onlookers alike following concerns about lower GPU demand due to potentially lower AI development costs demonstrated by Chinese firm DeepSeek's AI models.
New Trump Administration Discusses Limiting Sales Of NVIDIA's H20 GPUs To China, Says Report
Ever since OpenAI surprised the world by publicly unveiling ChatGPT, NVIDIA's GPUs, which are responsible for training and powering the model, have been at the center of the US government's attention. The Biden administration introduced several rounds of sanctions against NVIDIA's GPUs, which effectively limited the firm from selling its newer GPUs to China. One round, imposed in 2022, limited H100 and H200 GPU sales to China in 2022. In response, NVIDIA developed tuned-down variants called the H800 and A800, but another round in 2023 prevented the firm from selling these as well.
As per Bloomberg, the Trump administration is now considering expanding the scope of the sanctions on NVIDIA's H80 GPUs. Reports suggest that these GPUs are a China-exclusive product that are of lower performance than the H100 GPUs. NVIDIA's latest GPUs, the Blackwell lineup, is currently shipping. Therefore, most of the world's AI models are trained on the H100 and H200 GPUs.
Rumors from Taiwan claimed in September last year that NVIDIA had stopped taking H20 AI accelerator orders from Chinese firms. While the reasons behind the stop remained unclear, it was speculated that the US government could expand the scope of its sanctions. Other estimates have suggested that the GPUs could generate as much as $12 billion in revenue for the firm despite having 41% lower cores and 28% lower performance over the H100.
The news comes after DeepSeek's AI products wreaked havoc on Wall Street and caused a trillion dollar bloodbath on Monday. Investors fretted over whether the billions of dollars in spending expected for AI data center build out would materialize as the Chinese startup appeared to have developed a model on par with several American AI models at a much lower cost.
While the White House did not respond to Bloomberg's reports for comment, NVIDIA shard that it was ready to work with the new administration and its AI policy. The previous administration's sweeping GPU sanctions against China narrowed down a list of countries that could procure NVIDIA's products without restrictions. In response, the firm's hard hitting statement accused the government of hampering global AI development.
NVIDIA's response to China's DeepSeek AI displaying at par performance with American models asserted that the model shared that its "compute that is fully export control compliant." Its shares are down by 5.7% at the time of trading but have pared back some of the losses that stemmed after the report was published.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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