US stocks opened lower following new export restrictions imposed by the Commerce Department on Nvidia and AMD, which could cost Nvidia around $5.5 billion. The new licensing requirements target the H20 AI chip, primarily exported to China, a vital market for both companies. Shares of Nvidia and AMD saw steep declines as investors reacted to these developments amidst prior market volatility caused by ongoing tariff discussions. The Commerce Department emphasizes the need to protect national security amid concerns over China's advancements in AI technology and supercomputer capabilities.
The Commerce Department has imposed new export restrictions on Nvidia and AMD, requiring licenses for semiconductor exports to China to prevent the country from advancing in AI technology.
Nvidia estimates a potential loss of $5.5 billion due to the new restrictions, which target the export of its popular H20 chip crucial for artificial intelligence applications.
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