Nvidia stock drops as Huawei unveils new AI chip amid US export ban; will Huawei's Ascend 910D AI chip outperform Nvidia's H100
Nvidia's shares fell 2% in Monday's early trading after a report said that Huawei would be launching a new, and advanced AI chip, as per Yahoo Finance.
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Huawei's move comes after the US government banned Nvidia's chip sales to China amid the rising trade war between both nations.
Huawei's New AI Chip
According to a Wall Street Journal report, Huawei is creating a new AI chip named the Ascend 910D that it believes will surpass Nvidia's H100 chips in performance. The new chips are successors to Huawei's 910B and 910C chips and are currently in the early stages of development, as per the report. The firm has already contacted a few Chinese technology companies to test the chips, reported Wall Street Journal.
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Delivery of Other Huawei Chips to China
Huawei will also deliver more than 800,000 units of the previous 910B and 910C models to clients, including state-owned telecom operators and AI developers like ByteDance, the owner of TikTok, as per the report.
Nvidia's Losses Due to US Export Ban
The timing of the announcement could not be more unfortunate for Nvidia. The chipmaker had recently reported that it would suffer a $5.5 billion loss following the US export ban on its H20 AI chips, designed for the Chinese market, as per Yahoo Finance. The analysts at JPMorgan estimate that the ban has the potential to cut Nvidia's revenue by as much as $16 billion this year alone, according to the report.
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Nvidia's China business is a substantial portion of its revenue stream, DA Davidson analyst Gil Luria estimated that about 40% of Nvidia's revenue comes from China due to chip smuggling, reported Yahoo Finance.
While, analysts at Bernstein had reported that China accounted for $17 billion, or 13%, of Nvidia's revenue in its fiscal year 2025, as per Yahoo Finance.
Nvidia Stock Takes a Major Hit
Nvidia stock has fallen more than 17% this year, as it suffered from investor scrutiny over AI spending from Big Tech giants and US president Donald Trump's trade war, according to the report.
The US government said it has launched an investigation into Nvidia over the use of its AI chips in China, as per the report.
FAQs
Why did Nvidia's stock fall on Monday?
Nvidia's stock fell by 2% after news broke that Huawei is developing a new AI chip, the Ascend 910D, which could surpass Nvidia's current top chip, the H100, as per Yahoo Finance.
How will the US export ban affect Nvidia?
The US export ban prevents Nvidia from selling its H20 AI chips to China, which is expected to cost the company $5.5 billion in losses, as per Yahoo Finance. Analysts predict the ban could reduce Nvidia's total revenue by up to $16 billion this year.
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