New U.S. export controls on Nvidia and AMD chips are the latest escalation in the Trump administration’s effort to throttle China’s AI ambitions.

Nvidia warned it will absorb a $5.5 billion hit as a result, after U.S. authorities banned exports of its top‐end H200/H20 AI processors to Chinese data centers.

AMD faces similar curbs, and global chip stocks slid sharply on the news.

Tech Titans Tumble

Nvidia shares plunged over 6% in New York trading, wiping out roughly $160 billion in market cap.

AMD dropped by nearly 7% on concerns its MI200 GPUs would also be blocked.

Broadcom, Arm, Samsung, SK Hynix, ASML and other semiconductor names all saw double‐digit declines as traders braced for higher prices and tighter supply chains.

Safe havens like gold and U.S. Treasuries rallied as investors fled equities.

This is a full‐blown rout. Big Tech, once a safe harbor for growth‐hungry investors, is now on the front lines of geopolitics.

Playing Defense in the AI Arms Race

By targeting the chips that run generative AI models, the U.S. is effectively saying: “If you want to build the next ChatGPT, you’ll do it without our hardware.”

It’s a stark shift from the pretense of “technology for all,” underscoring a new reality where national security trumps free trade.

Their goal is to slow China’s lead in AI by choking off access to the latest GPUs.
They intend to do this with Section 232–style export restrictions (à la steel & aluminum) but for semiconductors.

The U.S. will weaponize technology exports to shape geopolitical outcomes, not just balance trade deficits.

Some experts warn these controls could backfire by accelerating China’s push for homegrown chip fabrication and making U.S. firms lose a massive addressable market.

Supply Chains, Prices, and R&D

Expect U.S. allies (Japan, South Korea, Taiwan, EU) to see surges in chip orders as companies scramble for “approved” sources.

And with fewer suppliers cleared to ship advanced GPUs, street prices could spike, squeezing cloud providers and AI startups alike.

From the look of things, U.S. chipmakers may double down on domestic manufacturing incentives, but building fabs takes years. Meanwhile, Chinese firms will pour even more resources into SMIC, YMTC, and C-SKY alternatives.

In short: While the U.S. hopes to clip China’s wings, it also risks sloshing turbulence through the entire global semiconductor ecosystem.