$8.5 billion Trump move sees markets sink
An update by the Trump administration has led a high profile US company to announce a $8.5bn revenue hit, leading stock markets to fall.
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US indices fell on Wednesday after a “surprise” move by the Trump White House saw crucial American chip maker Nvidia state it could take am $8.5 billion hit to its quarterly earnings.
Its shares dropped by almost 7 per cent on Wednesday while the tech-heavy Nasdaq finished the day down by more than 3 per cent.
The grim earnings announcement came after the US government told Nvidia its H20 graphics chip would require an export licence to China and some other nations.
In 2022, then-president Joe Biden put restrictions in place on high end chips because of concerns they could be used by foreign adversaries. Nvidia created the H20 for China to not fall afoul of those restrictions.
That shock has been compounded because Nvidia reportedly thought it was off the hook.
Earlier this month, Nvidia’s high profile CEO Jensen Huang dined at Mar-a-Lago, Donald Trump’s resort in Florida.
At the time, Nvidia promised huge investments on US soil, which Mr Trump has trumpeted as being a sign his tariffs are working.
Following that, there were reports the Trump administration had backed off from moves to restrict the chip from China.
But voices on both sides of politics in the US have expressed concern that the H20 chip is still too powerful. For instance, Chinese AI firm Deep Seek, which rocked markets when its capabilities emerged, uses Nvidia’s H20 chip.
However, other analysts have said removing the H20 chip will simply allow the Chinese chip maker Huawei to meet Beijing’s needs.
The H20 brought in as much as $US15 billion in revenue for Nvidia in 2024. It’s been reported Chinese firms had stockpiled $US16bn worth of H20 chips amid fears of controls on them.
The US government has now said the H20 chip could help make super computers for overseas adversaries.
Analyst Ed Mills, from investment bank Raymond James, said the H20 restrictions were a “surprise, given explicit approval of the product by the Biden administration and recent media reports that the US government was walking back from banning the product”.
In a filing with US financial authorities Nvidia said the H20 restrictions could see a single quarter revenue loss of $US5.5bn.
Originally published as $8.5 billion Trump move sees markets sink
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