Nvidia’s Shares Fall as AI Chip Launch for China Delayed
Nvidia’s shares took a hit on Friday as the company reportedly postponed the release of a new artificial intelligence chip designed for the Chinese market to comply with U.S. export restrictions.
The stock was down around 2.4% in pre-market trade, amid a shortened trading day in the U.S. This news comes following a report from Reuters, citing sources familiar with the matter, that Nvidia informed Chinese customers about the delay of the AI chip launch until the first quarter of next year.
The chip, called the H20, is facing integration issues with server manufacturers, which led to the delay, according to Reuters. Nvidia has not yet commented on the situation.
In October, the U.S. government tightened export curbs on AI chips to China, including Nvidia’s A800 and H800 chips. These specific semiconductors were designed for China. In addition to the H20, Nvidia is also preparing to launch two other export-compliant chips, the L20 and L2.
The delay in the H20 launch could pose a setback for Nvidia, as the company generates a significant portion of its revenue from China, and faces competition from local players like Huawei. Despite reporting a tripled revenue in the September quarter, the company warned that sales in regions affected by export restrictions will “decline significantly” in the current quarter.
As the technology landscape evolves and geopolitical tensions continue to impact trade, Nvidia and other semiconductor companies face complex challenges in navigating the global market.
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