Nvidia stock falls as China’s Huawei reportedly boosts AI chip production after Trump’s export ban

Nvidia (NVDA) stock fell as much as 3.6% premarket Monday after a report from Reuters said Chinese tech giant Huawei is set to begin shipping advanced AI chips as soon as next month after Trump’s new export rules effectively banned the company from selling its H20 chips in China.

Huawei’s new 910C chips are reportedly competitive with Nvidia’s H100 AI chips, which are two generations behind its latest Blackwell chips. The H100 GPUs (graphics processing units) were banned from export to China by the US government in 2022.

Though Nvidia has adapted to multiple new US trade rules by creating chips specifically for the Chinese market, the ever-tightening restrictions mean those chips are far less powerful than their mainstream counterparts.

The report of the latest Huawei chip comes nearly one week after Nvidia said the US government had effectively banned sales of its H20 graphics processing units — a version of its H100 AI chips made for Chinese consumers to comply with US trade rules.

The House Select Committee on China also released a statement saying it was “demanding answers” from Nvidia about whether it had previously complied with trade restrictions.

Fellow chip stocks Advanced Micro Devices (AMD) (also subject to the new US export rules), Qualcomm (QCOM), and Broadcom (AVGO) also fell Monday, each dropping around 2% premarket. Nasdaq futures dipped 1.5%.

Nvidia disclosed last week that it will record a $5.5 billion hit from lost inventory and contracts in the first quarter due to the change in trade policy. JPMorgan analyst Harlan Sur projected that, overall, Nvidia will lose as much as $16 billion in the current fiscal year from the H20 ban.

Bernstein analyst Stacy Rasgon said last week in a note to investors following the news: “Banning the H20 makes little sense to us…a ban essentially simply hands the Chinese AI market over to Huawei.”

China accounted for $17 billion, or 13%, of Nvidia’s revenue in its fiscal year 2025, Rasgon noted.

Shares of Nvidia fell 7% on the day after the restriction was announced. The company saw roughly 8%, or $230 billion, erased from its market cap last week.

Nvidia CEO Jensen Huang visited China and met with trade officials in Beijing last week, while the company is simultaneously looking to expand its domestic manufacturing footprint, pledging $500 billion to the US AI supply chain buildout last week.

Nvidia has said it follows trade rules “to the letter,” and the company was critical of tightening US trade policy under the prior administration.

When former US President Biden passed the AI Diffusion rule — set to go into effect in May — capping AI chip exports on a country basis and limiting US companies’ data center expansion abroad, Nvidia essentially argued that tighter rules would only bolster foreign competition.