Nvidia's $5.5 Billion Setback: AI Chip Trade Faces Turbulence

Tech stocks, including Nvidia and AMD, face a downturn as U.S. restrictions on AI chip exports to China impact market value. Nvidia could lose $160 billion, with its China revenue already decreasing. Despite new plans for U.S. AI servers, sector-specific tariffs threaten further financial strain in semiconductor markets.

On Wednesday, global tech stocks took a hit due to U.S. President Donald Trump's shifting trade policies affecting semiconductor companies, including AI leader Nvidia. The industry feels the impact of tariffs and export restrictions as Nvidia warns of a $5.5 billion loss from curtailed AI processor exports to China.

Shares of Nvidia and AMD, among other AI-related chip firms, plummeted as the U.S. tightened export curbs targeting key Chinese markets. Analysts remain concerned about Big Tech's spending and the sector's declining outlook. The restrictions mark a significant challenge for companies relying on Chinese revenue streams.

As sector-specific tariffs loom, Nvidia plans to establish AI servers in the U.S. are seen as a strategic maneuver but may offer limited relief. Amidst global selloffs, chip demand from major cloud companies helps cushion the broader impact. However, market sentiment reflects skepticism about the industry's near-term prospects.

(With inputs from agencies.)