Nvidia stock under pressure after report of AI chip delay for China

Nvidia stock under pressure after report of AI chip delay for China

Shares of Nvidia Corp. fell Friday following a report that the tech giant will delay the launch of one of its new artificial intelligence chips destined for China.

Nvidia will now roll out one of three big AI chips for that market early next year Reuters reported, citing sources. Earlier this month, a report surfaced that Nvidia planned the trio of AI chips for China after the U.S. government blocked it from selling high-end chips in that country.

The sources said the delay involved the most potent of the three — the H20 — and another said the launch may not happen until February or March due to problems manufacturers were having integrating the chip.

Nvidia stock (NVDA) fell 1.4% shortly before the close in a shortened trading day on Black Friday. The stock has lost about 2.6% this week amid some disappointment over the chip giant’s results that still blew past Wall Street expectations.

Questions about Nvidia’s future sales to China are viewed by some as a big uncertainty surrounding the company’s fortunes, as its shares have soared 233% this year in a fever for AI-related investments.

Export restrictions, recently set by the U.S. administration, have dictated what types of chips Nvidia can sell to China for AI uses. In its latest results, the company said the fiscal fourth quarter will see a sharp fall in sales to China, though that would be more than compensated by growth in other regions.

Nvidia Chief Financial Officer Colette Kress told MarketWatch earlier this week that the company “will work through” its issues in China.

“Things are different, with the U.S. government export controls, and what they would like to see. We need to follow that extremely strictly, that is something we will work through to help our customers,” said Kress.

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