The CEO of Nvidia Corporation NVDA, Jensen Huang, has reportedly arrived in Beijing following the recent implementation of U.S. restrictions on the company’s chip sales to China.
What Happened: Huang’s visit to China, which began on Wednesday, involves discussions with officials and tech leaders about the implications of the U.S.’s decision to impose further restrictions on its sales in the country. This information comes from local media and a source familiar with Huang’s travel plans, according to a report by the Financial Times.
The China Council for the Promotion of International Trade, a government-affiliated trade group that significantly influences U.S.-China business relations, invited Huang to visit. This information was shared on Weibo, a Chinese state media social media service.
In a meeting with Ren Hongbin, the head of the China Council for the Promotion of International Trade, Huang reportedly emphasized the importance of the Chinese market to Nvidia, particularly in light of the U.S.’s ban on sales of its H20 artificial intelligence chips to the country. “We hope to continue to cooperate with China,” Huang stated, reported Edge Malaysia, citing China’s state broadcaster, CCTV.
Why It Matters: On Wednesday, Nvidia responded to a national security investigation, asserting its compliance with U.S. export rules following the escalated restrictions on AI chip sales to China. This response came after the company was questioned about the sale of its H20 processors, which recently became subject to new export restrictions. Nvidia revealed that the new controls would lead to a $5.5 billion reduction in its earnings.
Nvidia believed it could continue selling the chip to China after a meeting between Huang and President Donald Trump at Mar-a-Lago this month. The company assured major Chinese clients, including Alibaba BABA, ByteDance and Tencent TCEHY, that H20 purchases would not be impacted, reported FT.
Despite the restrictions leading to a more than 6% drop in Nvidia’s shares, some Wall Street analysts view this as a potential buying opportunity. According to a note shared by Bank of America analyst Vivek Arya, the latest H20 chip restrictions to China pose only a “manageable risk” to Nvidia’s sales outlook. This perspective suggests that, while unwelcome, the restrictions were largely anticipated.
Nvidia stock plunged 6.9% to close at $104.49 on Wednesday, as per BenzingaPro. Over the past month, the stock plunged nearly 13%.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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