Bargaining chips
Nvidia's stock slump worsened overnight as it became even more embroiled in Trump's trade war. But the chipmaker still has a very strong story to tell.
Nvidia has been the engine room of the great post-COVID market melt-up — a trillion-dollar distillation of every bet on AI, reshoring and America’s industrial rearmament. But amid the chaos and caprices of Donald Trump’s tariff agenda, the chipmaker is feeling the heat.
Its stock closed down nearly 7% overnight, on the back of its announcement to investors it will take a USD5.5 billion ($8.7 billion) charge on inventory and purchase obligations tied to its H20 chip, after Washington pulled the deliberately dumbed down AI GPU from the export‑control safe list. Since their January peak, Nvidia shares have fallen nearly 25%.
Both the H20 and AMD’s MI300 China variant were designed to thread the needle of American export law, gaming the technical specs to stay just on the right side of legal. The aim was to build chips that weren’t “leading edge” on paper but still good enough to sell into the China market, while pretending that American dominance in AI remained safely unchallenged.
This was always a high-stakes play. Neither the Biden nor Trump administrations have made any secret of their desire for China’s AI sector to remain roughly at the level of a high school science project. The technical thresholds were always more mood than ironclad — and a change in that mood has now cost Nvidia billions, along with its aura of invincibility.
