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Shares in computer chipmakers slumped on Wednesday after Nvidia (NVDA) said tighter US government controls on exports of computer chips used for artificial intelligence will cost it an extra 5.5 billion dollars (£4.15 billion).
The company, which announced on Monday that it will produce its artificial intelligence supercomputers in the United States for the first time, said the government told it that its H20 integrated circuits and others of a similar bandwidth would be subject to the licensing requirements for the “indefinite future”.
In a regulatory filing, Nvidia said the government said the controls addressed risks that the products “may be used in or diverted to, a supercomputer in China”.
Shares in Nvidia and rival chipmaker Advanced Micro Devices (AMD) (AMD) each fell about 6% in morning trading on Wednesday.
AMD said in a regulatory filing on Tuesday that the export controls could potentially result in a charge of around 800 million dollars (£604 million) in “inventory, purchase commitments and related reserves”.
The US Commerce Department said on Wednesday that its new export licensing requirements pertain to Nvidia’s H20, AMD’s MI308 chips “and their equivalents”.
It said it is “committed to acting on the President’s directive to safeguard our national and economic security”.
Asian technology giants also saw big declines. Testing equipment maker Advantest’s (6857.T) shares fell 6.7% in Tokyo, Disco Corp (6146.T) lost 7.6% and Taiwan’s TSMC (2330.TW) dropped 2.4%.
The news of the new controls came after Senator Elizabeth Warren urged Commerce Secretary Howard Lutnick to impose restrictions on exports of Nvidia’s H20 and other advanced AI chips to China.
“I write with great concern regarding reports that the Commerce Department has paused its plan to restrict the export of powerful advanced AI chips like Nvidia’s H20 to the People’s Republic of China (PRC),” Ms Warren wrote in a letter posted on the website of the US Senate’s Committee on Banking, Housing and Urban Affairs.
It said former president Joe Biden had not included the H20 chips in controls his administration placed on exports of advanced AI chips.
The emergence of China’s DeepSeek AI chatbot in January renewed concerns over how China might use the advanced chips to help develop its own AI capabilities.
Nvidia said on Monday it has commissioned more than one million square feet of manufacturing space to build and test its specialised Blackwell chips in Arizona and AI supercomputers in Texas — part of an investment the company said will produce up to half a trillion dollars of AI infrastructure in the next four years.