On April 15, 2025, NVIDIA announced a $5.5 billion charge due to new U.S. government restrictions. AMD also reported an $800 million impact from these regulations.
However, investors are skeptical. They see broader implications for the entire semiconductor and AI sectors. The semiconductor industry has been declining since April 15. Regarding NVIDIA, third-party data indicates that by Q1 2025, NVIDIA's H20 chip sales in China amounted to approximately $16 billion. The new restrictions from the Trump administration specifically target the H20 chip.
These U.S. government restrictions on NVIDIA's H20 chip aim to limit China's access to advanced AI technology. The restrictions require NVIDIA to obtain licenses for exporting H20 chips. Amid investor concerns, NVIDIA CEO Jensen Huang visited Beijing on April 17.
Public information reveals that Huang met with Chinese Vice Premier He Lifeng, Chairman of the China Council for the Promotion of International Trade, and Liang Wenfeng, founder of the generative AI startup DeepSeek. Huang emphasized China's importance to NVIDIA and expressed a desire to continue cooperation. He also discussed the possibility of customizing a new generation of chips for Chinese clients to comply with U.S. regulations.
Currently, DeepSeek, a leading AI company in China, is rumored to have used H20 chips for training. Without H20 supply, how long will it take to develop customized products for Chinese clients? Even if such products are developed, will they comply with U.S. regulations? Notably, NVIDIA has previously collaborated with DeepSeek, integrating its open-source model DeepSeek-R1 into NVIDIA's NIM (NVIDIA Inference Microservices) platform.
Nevertheless, the market remains unconvinced. Investors are not optimistic about Huang's visit to China. On Monday, news emerged that Huang met with Japanese Prime Minister Shigeru Ishiba in Tokyo to discuss the energy infrastructure needed for AI development. To support rapid AI growth, Japan needs to expand its power generation capacity and build new infrastructure.
Despite these efforts, NVIDIA's stock opened below $100 on Monday, hitting a low of $95.04. While multiple factors contribute to the stock's decline, recent tariff policies from the Trump administration are significant disruptors.
Is this merely a market overreaction? Can a great company truly make a comeback?
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