Latest news with #AI-chip
Yahoo
29-05-2025
- Business
- Yahoo
Nvidia CEO turns heads with stern warning about China AI market
Nvidia CEO turns heads with stern warning about China AI market originally appeared on TheStreet. Move over, Jimmy Stewart. Jensen Huang's got this one covered. In the classic 1939 film 'Mr. Smith Goes to Washington,' Stewart portrays Jefferson Smith, a naive, newly appointed U.S. senator who takes on government corruption. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💵 While nobody is likely to call Huang naive, the co-founder and CEO of AI-chip juggernaut Nvidia () spoke bluntly about the Trump administration's ban on sales of the company's H20 chips to China. That prompted Wedbush analysts to issue a research note titled "Mr. Huang Goes to Washington." "China is one of the world's largest AI markets and a springboard to global success," Huang said during the company's earnings call. "With half of the world's AI researchers based there, the platform that wins China is positioned to lead globally." He wasn't kidding. A recent Morgan Stanley report found that China's AI industry and related sectors could grow into a market valued at $1.4 trillion by 2030. U.S. export controls could create barriers for AI development in China but won't stop its progress, the investment firm said, noting that "AI is at the center of business priorities, consumer behavior and economic growth in China." "Today, however, the $50 billion China market is effectively closed to US industry," Huang said. "The H20 export ban ended our Hopper data center business in China. We cannot reduce Hopper further to comply. "As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed. We are exploring limited ways to compete, but Hopper is no longer an option. China's AI moves on with or without US chips. It has to compute to train and deploy advanced models." More Nvidia: Analysts issue rare warning on Nvidia stock before key earnings Analysts double price target of new AI stock backed by Nvidia Nvidia CEO shares blunt message on China chip sales ban The Santa Clara, Calif., company, which posted better-than-expected fiscal-Q1 earnings and revenue, said it had missed out on $2.5 billion in sales during the quarter due to the export restrictions on H20. "The question is not whether China will have AI; it already does," Huang said. "The question is whether one of the world's largest AI markets will run on American platforms." "Shielding Chinese chipmakers from US competition only strengthens them abroad and weakens America's position," he noted. "Export restrictions have spurred China's innovation and scale." The Morgan Stanley report said that over the next five years, China aims to achieve full independence from foreign countries in its AI development. Since it's subject to U.S. export restrictions, the report said, the nation is prioritizing more efficient and less expensive AI technologies, most notably DeepSeek. That's the Chinese startup that shivered the tech world's timbers back in January with an AI model that was reportedly much cheaper than those of its American counterparts. "The US has based its policy on the assumption that China cannot make AI chips," Huang said. "That assumption was always questionable and now it's clearly wrong. China has enormous manufacturing capability." Wedbush, which reiterated its $175 price target and outperform rating on Nvidia shares, said the company executed well despite the loss of H20 representing a greater headwind than the investment firm and investors expected."While NVDA did talk to the significance of the lost opportunity in China," the investment firm said, "Jensen also appeared to make a concerted effort to credit the current administration for recent sovereign deals, talk to NVDA's plans to further US investment (a key touch point for President Trump), while also suggesting management has faith in the US government's likely future actions with regards to trade and AI." Wedbush said this approach was likely best suited to minimizing potential political headwinds for Nvidia. But "it also highlights that political decisions (AI diffusion, tariff, and China policies) are seemingly the only potential significant stumbling blocks for NVDA over the next 12+ months." DA Davidson boosted its price target on Nvidia to $135 from $120 and affirmed a neutral rating on the shares, according to The Fly. The Q1 results were mixed, with better-than-expected revenue numbers but a notable impact from the lack of H20 sales into China in Q1 and Q2, the firm said. The firm said Wall Street was underaccounting the Chinese contribution to Nvidia revenue and that this topic represents the largest overhang on the stock. Davidson said this will continue until the Trump administration provides an official position that resolves the matter in one direction or the other. Stephen Guilfoyle says Nvidia's results were impressive and "much, much better than feared given the mid-quarter change in the restrictions on what kinds of technology can be exported to China and other nations." "This pressured sales, suppressed margins and forced the firm to take an inventory-related charge against these earnings that fortunately was smaller than what the firm had warned it might be," he veteran trader, whose career dates back to the 1980s on the New York Stock Exchange, reiterated his stock price target of $165 on NVDA. "What's clear is that demand for all things AI-related has not let up in the least," Guilfoyle said. "What's also clear is that the Chinese market makes a material impact on the firm's overall performance. Cash flows are golden, and the balance sheet is simply fortress-like." Nvidia CEO turns heads with stern warning about China AI market first appeared on TheStreet on May 29, 2025 This story was originally reported by TheStreet on May 29, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
29-05-2025
- Business
- Miami Herald
Nvidia CEO turns heads with stern warning about China AI market
Move over, Jimmy Stewart. Jensen Huang's got this one covered. In the classic 1939 film "Mr. Smith Goes to Washington," Stewart portrays Jefferson Smith, a naive, newly appointed U.S. senator who takes on government corruption. Don't miss the move: Subscribe to TheStreet's free daily newsletter While nobody is likely to call Huang naive, the co-founder and CEO of AI-chip juggernaut Nvidia (NVDA) spoke bluntly about the Trump administration's ban on sales of the company's H20 chips to China. That prompted Wedbush analysts to issue a research note titled "Mr. Huang Goes to Washington." "China is one of the world's largest AI markets and a springboard to global success," Huang said during the company's earnings call. "With half of the world's AI researchers based there, the platform that wins China is positioned to lead globally." He wasn't kidding. A recent Morgan Stanley report found that China's AI industry and related sectors could grow into a market valued at $1.4 trillion by 2030. U.S. export controls could create barriers for AI development in China but won't stop its progress, the investment firm said, noting that "AI is at the center of business priorities, consumer behavior and economic growth in China." "Today, however, the $50 billion China market is effectively closed to US industry," Huang said. "The H20 export ban ended our Hopper data center business in China. We cannot reduce Hopper further to comply. "As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed. We are exploring limited ways to compete, but Hopper is no longer an option. China's AI moves on with or without US chips. It has to compute to train and deploy advanced models." More Nvidia: Analysts issue rare warning on Nvidia stock before key earningsAnalysts double price target of new AI stock backed by NvidiaNvidia CEO shares blunt message on China chip sales ban The Santa Clara, Calif., company, which posted better-than-expected fiscal-Q1 earnings and revenue, said it had missed out on $2.5 billion in sales during the quarter due to the export restrictions on H20. "The question is not whether China will have AI; it already does," Huang said. "The question is whether one of the world's largest AI markets will run on American platforms." "Shielding Chinese chipmakers from US competition only strengthens them abroad and weakens America's position," he noted. "Export restrictions have spurred China's innovation and scale." The Morgan Stanley report said that over the next five years, China aims to achieve full independence from foreign countries in its AI development. Since it's subject to U.S. export restrictions, the report said, the nation is prioritizing more efficient and less expensive AI technologies, most notably DeepSeek. That's the Chinese startup that shivered the tech world's timbers back in January with an AI model that was reportedly much cheaper than those of its American counterparts. "The US has based its policy on the assumption that China cannot make AI chips," Huang said. "That assumption was always questionable and now it's clearly wrong. China has enormous manufacturing capability." Wedbush, which reiterated its $175 price target and outperform rating on Nvidia shares, said the company executed well despite the loss of H20 representing a greater headwind than the investment firm and investors expected. Related: Nvidia stock surges after earnings surprise "While NVDA did talk to the significance of the lost opportunity in China," the investment firm said, "Jensen also appeared to make a concerted effort to credit the current administration for recent sovereign deals, talk to NVDA's plans to further US investment (a key touch point for President Trump), while also suggesting management has faith in the US government's likely future actions with regards to trade and AI." Wedbush said this approach was likely best suited to minimizing potential political headwinds for Nvidia. But "it also highlights that political decisions (AI diffusion, tariff, and China policies) are seemingly the only potential significant stumbling blocks for NVDA over the next 12+ months." DA Davidson boosted its price target on Nvidia to $135 from $120 and affirmed a neutral rating on the shares, according to The Fly. The Q1 results were mixed, with better-than-expected revenue numbers but a notable impact from the lack of H20 sales into China in Q1 and Q2, the firm said. The firm said Wall Street was underaccounting the Chinese contribution to Nvidia revenue and that this topic represents the largest overhang on the stock. Davidson said this will continue until the Trump administration provides an official position that resolves the matter in one direction or the other. Stephen Guilfoyle says Nvidia's results were impressive and "much, much better than feared given the mid-quarter change in the restrictions on what kinds of technology can be exported to China and other nations." "This pressured sales, suppressed margins and forced the firm to take an inventory-related charge against these earnings that fortunately was smaller than what the firm had warned it might be," he said. Related: Veteran stock trader takes hard look at Nvidia ahead of earnings The veteran trader, whose career dates back to the 1980s on the New York Stock Exchange, reiterated his stock price target of $165 on NVDA. "What's clear is that demand for all things AI-related has not let up in the least," Guilfoyle said. "What's also clear is that the Chinese market makes a material impact on the firm's overall performance. Cash flows are golden, and the balance sheet is simply fortress-like." The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
29-05-2025
- Business
- Yahoo
Nvidia stock surges after earnings surprise
Nvidia stock surges after earnings surprise originally appeared on TheStreet. Updated: 1:55 pm EST to reflect current stock price. Nvidia's stock was one of the stock market's top performers in 2023 and 2024. However, gains have been harder to come by in 2025. Worry that government restrictions will crimp the AI-chip maker's global sales growth has increased, and demand from the hyperscalers — the likes of Amazon, Microsoft and other providers of cloud services and infrastructure — could a result, Nvidia's shares peaked in early April. They'd delivering a staggering 171% return in 2024, retreated 37% through early April, then found their footing after President Donald Trump on April 9 paused most of the reciprocal tariffs he'd imposed. Many investors had been expecting headwinds to ding revenue and profit growth at Nvidia. () The rally in the shares over the past six weeks has caught them off guard. NVDA shares have gained more than 50% off the bottom in April, and based on investors' early reaction to the fiscal-first-quarter report, that market move doesn't appear to be changing. The Santa Clara, Calif., company was best known for making premium graphics-processing units, or GPUs, used in videogaming consoles and PCs. Then it won fans among the cryptocurrency crowd when they discovered its GPUs were ideally suited for mining bitcoin and other digital currencies. Nowadays, demand from those areas pales in comparison to the tidal wave of demand for its GPUs from companies investing in artificial are using AI to hedge risks. Retailers are exploring AI to manage inventory and crimp theft. Health-care companies are exploring its use in drug development. Manufacturers are using it to improve quality and supply chains. Even the U.S. government is exploring AI use on the battlefield. The flurry of activity followed the massively successful launch of OpenAI's large language model, ChatGPT, in 2022. ChatGPT was the fastest app to reach one million users, and its rapid adoption sparked significant interest in developing competing AI chatbots, including Gemini from Alphabet's Google () . In addition to the millions of people who are using AI chatbots to improve search and create content, businesses are plowing big money into agentic-AI assistants, which can help streamline many business processes. Altogether, the interest in training and operating AI solutions has fueled a tsunami of spending on network infrastructure, including Nvidia's GPUs. Nvidia's annual revenue has surged to $130 billion from $17 billion in 2021 thanks to AI demand, and that's been a boon to its bottom line. The company's earnings per share totaled $2.94 last year, up 130% year over year. Hyperscalers like Meta, Alphabet, Amazon, and Microsoft have ramped spending over the past two years to make sure their cloud networks can handle all their customers' AI activity. As a result, Microsoft, Google, and Amazon alone forked out $192 million on the stuff necessary to build their businesses in 2024, up from capital expenditures of $117 billion in 2023. AI spending is expected to climb again this year, but many think that growth in that spending is peaking thanks to the law of large numbers. In 2025, capital spending from Meta, Google, Amazon and Microsoft is forecast to grow 41%, down from 59% in 2024. Nevertheless, growth is growth, and even with tightening restrictions on sales of next-gen GPUs to China, Nvidia delivered impressive fiscal-first-quarter results. More Nvidia: Analysts issue rare warning on Nvidia stock before key earnings Analysts double price target of new AI stock backed by Nvidia Nvidia CEO shares blunt message on China chip sales ban Quarterly revenue grew 12% sequentially and 69% year-over-year to $44.1 billion thanks to surging interest in Nvidia's latest, and pricey, Blackwell AI chips. That was about $810 million better than analysts anticipated. Unsurprisingly, data-center sales, which include most AI revenue, were the brightest shining star. That segment's revenue rose 73% year-over-year to $39.1 billion. Gaming and chips for autos, however, also saw substantial growth. Gaming revenue rose 48% from one year ago to $3.8 billion, while autos rose 72% to $567 million. The results came despite Nvidia taking a $4.5 billion charge to write off excess H20 chips marketed in China because of new export restrictions. The write-offs caused gross margin to narrow to 61%. But if we back out the impact, gross margin ticked down to 71.3% from 73% in fiscal Q4. CEO Jensen Huang's C-suite had said margins would recover to the mid-70% area by the end of this year. Nvidia's adjusted earnings per share were 81 cents, up 33% from a year earlier. Non-GAAP EPS would've been 96 cents if not for the write-offs. Analysts were hoping for 75 cents. 'Global demand for Nvidia's AI infrastructure is robust. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate," said Huang. Nvidia's fiscal-second-quarter guidance was a bit shy of estimates, but Wall Street appears to be looking past that toward the potential easing of China restrictions. Nvidia expects sales of $45 billion in Q3, below analysts' projections for $45.7 billion. But that guidance includes an $8 billion headwind associated with H20 chips. If trade negotiations clear the way for Blackwell and H20 chip sales in China, guidance may prove to be too conservative. Daniel Ives, Wedbush Securities' influential technology stock analyst, was impressed by the quarter, saying Nvidia delivered a "very important print and guide for the broader tech world" and remarking that "the AI Revolution is heading into its next gear of growth despite the Trump tariff war playing out." Nvidia's stock price was up 3% in early afternoon action after trading up 4.6% earlier on Thursday, May stock surges after earnings surprise first appeared on TheStreet on May 29, 2025 This story was originally reported by TheStreet on May 29, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
08-05-2025
- Business
- Miami Herald
Chipmakers like Nvidia, AMD get a gift from Washington
The Trump administration late Wednesday announced what looked at first like innocuous changes in export rules for semiconductor companies. Innocuous the changes were not, and shares of Nvidia (NVDA) , Broadcom and Advanced Micro Devices all surged. Don't miss the move: Subscribe to TheStreet's free daily newsletter Nvidia jumped the most, 3.1% to $117.08. Broadcom (AVGO) added 2.4% to $204.81. AMD was up 1.8% to $100.36. The Van Eck Semiconductors Holders ETF (SMH) was up 2.2%. This group save for Nvidia is higher in morning trading on Thursday. The original restrictions, known as AI diffusion and developed by the Biden administration, had been scheduled to take effect next week. They had drawn strong opposition from major tech companies and foreign governments, Bloomberg News reported. Related: Uber CEO has a harsh message for frustrated employees The rule change actually requires new rules, which may take several months to develop. The idea is to simplify the standards needed to win government permission to sell to customers outside the U.S. while ensuring that chips don't fall into unfriendly hands. The key point: The rules, once enacted, would no longer limit how many high-end chips a country, such as Saudi Arabia or the United Arab Emirates, may buy from a chipmaker like AI-chip leader Nvidia or AMD, (AMD) which competes in that sector. The UAE recently pledged to invest $1.4 trillion in the U.S. And the disclosure of the plan comes as President Donald Trump is about to travel to the Middle East. Bloomberg/Getty Images Theoretically, new rules might enable chip companies to basically sell to whomever they wanted. But for national security reasons some countries would still face limits on what they can buy. Like, say, North Korea, Iran, Cuba and, oh yes, China. And standards would have to be set to limit what customers can do with the chips once they get them. An issue with some Nvidia products has been that individuals have bought the very high-end products, and taken them to, say, Singapore. Buyers there would resell them to customers not permitted by U.S. regulations in, say, China. The actual details aren't yet clear and other rules govern sales to China. Still, what the Trump administration wants to do is essentially gut the rules put in place by the Biden administration. More Nvidia: Will Nvidia get hit hard by AI capex risk?Analysts revise Nvidia price target on chip demandSurprising China news sends Nvidia stock tumbling Nvidia, already the biggest chipmaker and a key player in artificial intelligence, would like greater flexibility to do business outside the U.S., especially in China. Nvidia designs its chips in the U.S. and has them manufactured by others, most notably Taiwan Semiconductor (TSM) , usually in Asia. Nvidia CEO Jensen Huang has said China represents a potential market of $50 billion a year. And he's hungering to win a big share of that business for his company. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
The National
06-05-2025
- Business
- The National
How lobsters and prosthetic baby bumps entered the AI chip export debate
A recent decision by US AI company Anthropic to defend controversial chip export rules is continuing to reverberate throughout the technology world, and part of the support for its decision comes from an unusual area. Anthropic's stance has put it at odds with other American technology heavyweights such as Microsoft and Nvidia, who have worked in recent months to convince the Trump administration to completely overhaul chip export policies that seek to maintain the US lead in AI by making it more difficult for other countries, mainly China, to obtain powerful chips. "In some cases, smugglers have employed creative methods to circumvent export controls, including hiding processors in prosthetic baby bumps and packing GPUs [graphics processing units] alongside live lobsters," read a policy letter by Anthropic. In the footnotes of Anthropic's letter, it sources the prosthetic baby bump and lobster chip-smuggling story to WCCF Tech, a technology news forum established in 2004. "While at the port, the Chinese customs authorities noticed something was off about the woman and asked her for inspection," reads the story posted in 2022. "After having the fake belly removed, the customs authorities found a total of 202 Intel CPUs and 9 mobile phones within the fake prosthetic." Anthopic sourced a 2023 story in PC Mag in which Hong Kong authorities reportedly stopped people who were trying to smuggle 70 graphics cards in a cargo box containing live lobsters. That portion of its letter to the White House irked AI-chip powerhouse Nvidia, with a representative of the company accusing Anthropic of lying. "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters," a statement from the Nvidia representative said. It is worth pointing out that both instances cited by Anthropic are somewhat dated and nowhere near powerful enough to be accurately compared the highly sought after CPUs and GPUs often required for AI purposes. For instance, Nvidia's much touted Blackwell system is approximately the size of a car, and therefore not exactly easy to smuggle. All that said, on May 15, the chip export policies drafted under former president Joe Biden's administration will go into effect. Under the proposed rules, countries would be split into tiers that would determine how many powerful chips and GPUs they could buy. Falling into the first tier and largely unaffected by the rules are Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan and the UK. Other countries, such as Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE and Saudi Arabia, would fall into a second-tier category, making it more difficult – although not impossible – to obtain the chips needed for AI research and development. The third tier of countries – China, Iran, North Korea, Russia, Syria and Venezuela – will have the most difficulty obtaining GPUs and CPUs under the new rules, if they are applied. Early in 2025, US technology and AI giants such as Microsoft and Nvidia came out strongly against the diffusion rules, saying that they would backfire, and limit US tech influence in the world. Meanwhile, some countries seem to making progress in trying to buy chips for non-frontier AI uses without burdens or limits. According to a source, US President Donald Trump's administration is considering exempting the UAE from most of the policies through a deal involving Nvidia. Those options could include giving Nvidia the ability to sell chips to the UAE without restrictions, although other ideas are also being discussed. The development comes as Mr Trump prepares for his visit to the UAE. Other governments are still in wait-and-see mode. "We have substantive concerns with it," said a source representing a country falling into the second tier of the proposed chip export rules. The source said that the limited ability to acquire AI semiconductors and GPUs could severely affect the country's desire to build more data centres. "We're one of the largest hubs for data centres and they had no idea about that," the source said, referring to concerns raised with the White House when the AI diffusion rules were announced towards the end of the Biden administration. Although Anthropic's stance of mostly supporting the rules stands out in the technology community, there is nuance in its letter to the Trump administration. The technology company, largely viewed as a competitor to OpenAI, said that the chip export tier system should be tweaked. "We suggest allowing countries in Tier 2 with robust data centre security to obtain more chips through government-to-government agreements that prevent smuggling and align technology controls," Anthropic wrote, without naming countries or defining "robust" data centre security.
