Tech Stocks Tumble as Nvidia Warns of $5.5 Billion Hit from New US AI Chip Export Controls

In a significant development for the tech industry, Nvidia announced on Monday that it has secured over one million square feet of manufacturing space dedicated to its Blackwell chip and AI supercomputer production within the United States.

This news follows a concerning update for Nvidia and the broader tech market. On Wednesday, shares of Nvidia plummeted by 5.8% in pre-market trading after the company disclosed that new U.S. government restrictions on the export of AI chips would impose an additional $5.5 billion cost. Rival AMD experienced a similar downturn, with a 6.5% decline in its stock value.

The company revealed that the U.S. government informed them that their H20 integrated circuits and products of similar capabilities would now require licensing for exports for an “indefinite future,” citing risks that these technologies could be utilized in supercomputers in China.

These developments align with concerns expressed by Senator Elizabeth Warren, who wrote to Commerce Secretary Howard Lutnick, advocating for stricter export controls on Nvidia’s advanced AI chips. In her letter, she emphasized her alarm over reports suggesting that the Commerce Department had reconsidered its plans to limit these exports to China.

Warren pointed out that the Biden administration had previously not included H20 chips in the export controls on advanced AI technologies, raising questions about the past and future regulatory landscape.

The spotlight on the export controls has intensified following the rise of China’s DeepSeek AI chatbot in January, which has alarmed U.S. officials about potential advancements in China’s AI capabilities using American technology.

In light of recent events, Commerce Department officials have yet to comment on the situation as it develops. Meanwhile, Nvidia’s announcement regarding substantial investments in AI infrastructure, potentially amounting to half a trillion dollars over the next four years, signifies a bold commitment to U.S. manufacturing. This investment includes expanding facilities in Arizona and Texas.

Former President Donald Trump has lauded Nvidia’s decision as a victory for national manufacturing efforts, reinforcing the administration’s stance on fostering domestic semiconductor production.