Nvidia Faces $5.5 Billion Hit Amid Tighter US Export Controls

The tech and financial world was rocked this week as Nvidia, a key player in the global semiconductor and AI space, revealed it expects to take a $5.5 billion hit due to tighter US export rules targeting China. The news has sparked concern across markets, with Nvidia’s shares plunging over 6% in after-hours trading and S&P 500 futures slipping alongside other major indices.

The H20 chip, a cornerstone of Nvidia’s AI hardware portfolio and popular among Chinese clients, is now subject to export restrictions. Under the new US policy, the chip can only be sold to China with a special government license—one that will remain mandatory for the “indefinite future,” according to US officials.

This move escalates the ongoing US-China tech conflict and has implications well beyond Nvidia. Industry experts warn of broader disruptions to the semiconductor supply chain, as well as potential retaliatory actions. Some analysts see this as part of a negotiation strategy that may shift, but others believe it signals a longer-term decoupling of US and Chinese tech ecosystems.

Rui Ma, founder of Tech Buzz China, noted that continued restrictions could push Chinese firms to develop or turn to alternative chips, further accelerating the separation of supply chains. "It doesn't make any sense for any Chinese customer to be dependent on US chips," she said.

From a global perspective, this news coincides with heightened market volatility. Investors are also bracing for key US retail sales data, manufacturing figures, and corporate earnings—all unfolding amid an already tense geopolitical environment.