Amd And Nvidia Stocks Turn Lower After China Ai Chip Restrictions

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Amd And Nvidia Stocks Turn Lower After China Ai Chip Restrictions

AMD And Nvidia Stocks Turn Lower After China AI Chip Restrictions

The stock of Nvidia was down by 4%, while AMD's stock was down by 3% during Wednesday's trading session. According to reports, the US authorities are mulling over putting limitations on the AI chips export to China.

Considering how China is one of the world's economic powerhouse, this means fewer sales for AMD and Nvidia companies. According to experts, the US is going to apply these restrictions to stop the US adversaries from gaining dominance in the AI field.

AI Chips Sales To China Will Stop From July

The restrictions will likely be put in by the US commerce department and will become effective from July 2023. This will stop the chip companies like Nvidia, AMD, & others from sending AI-powered chips to China. If we look at Nvidia, it will become unable to sell its A800 chips to China without a license.

The analysts at Citi believe that Nvidia will face an impact of $400 million from the earlier US restrictions. But if these new limitations are applied, it will further intensify the losses.

Over recent years, the dependence on AI technologies has grown in China, which has also increased the need for AI-powered chips. Just this year, the data centre sales coming from China will be worth around 5-10% of the $30 billion sales.

Looking ahead, the SVP and CFO of Nvidia will be hosting a topic related to networks for AI. There's a good chance that the matter of limitations will be addressed at this upcoming event.

Despite the negative news, the total demand for the AI chips will be higher than the supply which will allow Nvidia to move its chips. That's why most analysts have still maintained a 'buy' rating for the Nvidia stock. This also raises the question of what will china do to substitute the loss of the AI chips coming from the US companies?

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