The trade war between the U.S. and China recently took an unexpected turn, and the biggest beneficiaries look to be Nvidia (NVDA -0.64%) and Advanced Micro Devices (AMD 0.04%). Both stocks popped after news broke that the U.S. is set to ease chip export restrictions, potentially allowing the companies to resume selling their artificial intelligence (AI) chips to China. China is a huge market that had recently been closed off to the two companies. Nvidia will now be allowed to sell its H20 graphics processin ...

Jensen Huang, co-founder and CEO of Nvidia Corp., speaks during a news conference in Taipei on May 21, 2025. I-hwa Cheng | Afp | Getty ImagesReplacing Nvidia is a tall order. While Chinese competitors are years behind the company's cutting-edge technology, many analysts and insiders warn they are catching up, thanks to U.S. export restrictions.U.S. chip restrictions on the sale of advanced semiconductor technology, especially those used in artificial intelligence, have been rolled out over several years, wi ...

Core Insights - Nvidia announced a quarterly charge of approximately $5.5 billion related to exporting H20 graphics processing units to China and other regions, resulting in a 4% decline in stock price during extended trading [1] - The U.S. government has mandated that Nvidia requires a license to export chips to China and several other countries, indicating potential growth constraints due to increasing export restrictions [2] Group 1: Financial Impact - The H20 chip, designed to comply with U.S. export restrictions, is projected to generate between $12 billion to $15 billion in revenue for 2024 [3] - Revenue from China has reportedly decreased to half of pre-export control levels, equating to approximately $17 billion [3] Group 2: Competitive Landscape - Competition in China is intensifying, with Huawei being listed as a competitor for the second consecutive year in Nvidia's 10K filing [4] - The H20 chip is comparable to Nvidia's H100 and H200 AI chips but has slower interconnection speeds [4] - DeepSeek, a Chinese company, has utilized H20 chips in its research to develop a competitive AI model that has disrupted markets [4] Group 3: Regulatory Environment - Nvidia is facing new export restrictions under "AI diffusion rules" set to take effect next month, which were initially proposed by the Biden administration [5]