China slams US chip export limits, Nvidia faces huge losses
China sharply criticizes the USA for tightening chip export controls. Beijing responds to Trump's accusations of breaching the trade agreement, while American restrictions impact Nvidia and other companies in the semiconductor industry.
Beijing reacted strongly to Washington’s new semiconductor export restrictions, describing them as an abuse. The spokesperson for the Chinese Embassy in the USA, Liu Pengyu, emphasized in a conversation with NBC News that China has "repeatedly expressed concerns" about the actions of the United States.
The immediate cause of the tensions is Donald Trump's remarks, accusing China of violating the terms of the preliminary trade agreement.
As CNBC reports, the USA previously banned its companies from using AI chips from Huawei, and the latest restrictions have affected manufacturers like Nvidia, Synopsys, and Cadence. The consequences are particularly severe for Nvidia, which estimates that the ban on selling H20 chips to China could result in a loss of up to $8 billion this quarter.
The U.S. has based its policy on the assumption that China cannot make AI chips. Assumption was always questionable. Now it’s clearly wrong, assessed Jensen Huang, CEO of Nvidia, adding that the company is stuck with $4.5 billion in unsold inventory.
The balance in US-China relations is fragile
The agreement reached on May 12 between the USA and China was supposed to suspend tariffs for 90 days. However, according to commentators, the escalation of technological restrictions may once again disrupt the fragile balance.
Washington is soon to announce a new, simplified export rule, replacing the earlier "AI diffusion rule" introduced by the Biden administration.
