Nvidia Plummets In Premarket—Projects $5.5 Billion Blow From New Restrictions On AI Chip Exports To China

Core Viewpoint - Nvidia's shares experienced a significant decline following the announcement of new export restrictions on its H20 AI chips to China, which were implemented by the Trump administration despite prior discussions that suggested a potential delay in such measures [1][3]. Group 1: Export Restrictions - The U.S. government has mandated that Nvidia requires a special license to export its H20 AI chips to China, including Hong Kong and Macau, or to companies based in those regions [2]. - The licensing requirement for H20 exports to China will be in effect "for the indefinite future," aimed at mitigating risks associated with the potential use of these products in supercomputers in China [3]. Group 2: Financial Impact - Nvidia anticipates a financial impact of approximately $5.5 billion in its first quarter results for the 2026 fiscal year due to these export restrictions [3]. Group 3: Stock Performance - Following the announcement, Nvidia's share price fell to $104.32, representing a decline of over 7% in premarket trading, and a total drop of 16.45% since the beginning of 2025 [5]. Group 4: Political Context - Nvidia CEO Jensen Huang's recent attendance at a $1 million-per-head fundraising dinner at Mar-a-Lago was initially thought to have influenced the Trump administration to delay the export restrictions, but the government has since decided to proceed with them [6]. - Lawmakers from both parties have been advocating for the imposition of these export controls, indicating bipartisan support for the restrictions [6]. Group 5: U.S. Manufacturing Plans - Nvidia has announced plans to construct two factories in Houston and Dallas to assemble its AI supercomputers entirely in the U.S., in partnership with Taiwanese manufacturers Foxconn and Wistron, with mass production expected to ramp up within 12-15 months [7].