Two of the biggest chipmakers in the United States have been told to halt exporting to China some of their AI-related technologies.
The US government had instructed Nvidia (NVDA) and AMD (AMD) to stop exporting specific high-performance chips to the second-largest economy in the world, the companies said on Wednesday.
Nvidia stated in a regulatory filing that it had been informed by US authorities that the requirement was because there was a chance that the items would be used by or diverted to a “military end user.”
After having previously projected $5.9 billion in revenue for the current quarter, the corporation now anticipates that it may lose $400 million in potential sales in China. Although Nvidia claimed it doesn’t have any paying clients in Russia, the new rule does apply to sales there.
The limitations are effective immediately and apply to systems using Nvidia’s A100 and upcoming H100 integrated chips.
In Wednesday’s after-hours trade, Nvidia shares fell 6.6% and AMD stock fell 3.7%.
Nvidia and AMD pointed out that the new mandate for chipmakers also includes a ban on exports to Russia.
Both businesses claimed that they do not currently export any goods to Russia.