US draws sword against China's DeepSec… Targeting Nvidia chips too

 The United States has intensified its technological restrictions on China by imposing new export controls on advanced AI chips, significantly impacting companies like Nvidia and AMD.​

🔒 New Export Controls on AI Chips

The U.S. government has mandated that Nvidia's H20 AI chips and AMD's MI308 chips now require export licenses for sales to China, with these licenses being indefinitely suspended. This action aims to prevent the use of these chips in Chinese supercomputers, which could enhance military capabilities. As a result, Nvidia anticipates a $5.5 billion charge due to unsellable inventory and canceled orders, while AMD expects an $800 million impact. 

🇨🇳 Focus on DeepSeek AI

The restrictions are partly in response to concerns about Chinese AI advancements, particularly the emergence of DeepSeek, a low-cost AI model that has disrupted the global AI landscape. U.S. officials are considering further penalties to prevent Chinese AI companies like DeepSeek from acquiring American technology. 

📉 Market Repercussions

Following the announcement, shares of Nvidia fell over 6% in after-hours trading, and AMD's shares dropped by 7%. The broader semiconductor sector also experienced declines, with companies like TSMC and ASML warning of increased market uncertainty due to related U.S. tariffs. ​

🏗️ Strategic Shifts

In response to the export restrictions, Nvidia plans to invest up to $500 billion in U.S.-based AI infrastructure over the next four years, including the construction of AI supercomputers in Arizona and Texas. This move aligns with the U.S. government's efforts to bolster domestic semiconductor manufacturing. ​

These developments mark a significant escalation in the U.S.-China tech rivalry, with potential long-term implications for global AI and semiconductor industries.