Nvidia (NVDA) stock slid 4% Wednesday after Bloomberg reported that Trump administration officials are “exploring additional curbs” on Nvidia’s chip sales to China.
Bloomberg’s report added that the talks are in the “very early stages.” The new restrictions would likely cover Nvidia’s H20 chips, which is a scaled-down product the chipmaker offers to meet existing US restrictions on shipments to China.
Nvidia said in a statement the company is “ready to work with the Administration as it pursues its own approach to AI. The thresholds set by the Biden Administration are based on performance levels reached five years ago and achieved by leading gaming and workstation products.”
The news comes amid a volatile week for Nvidia shares, which saw their worst one-day market cap loss in history on Monday. The stock slid nearly 17% as investors digested the growing popularity of a new cost-effective artificial intelligence model from the Chinese startup DeepSeek.
The team behind DeepSeek, the artificial intelligence model maker, claimed that its new AI model uses cheaper chips and less data. Investors grew concerned this could hurt future AI chip sales as well as bring into question the dominance of US hyperscalers in the market. They also worried the developments could challenge a consistent trend in the bull market of Nvidia and other Big Tech companies seeing their earnings estimates revised higher.
Nvidia shares rebounded 9% on Tuesday as many on Wall Street largely argued the sell-off was “overblown.” But Wednesday’s quick move lower following the Bloomberg report shows that the stock doesn’t appear to be out of the woods just yet.
Investors will be closely listening for updates from large Nvidia customers Tesla (TSLA), Microsoft (MSFT), and Meta (META) after the bell on Wednesday for further details on the current demand for AI chips.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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