Market reaction
Nvidia (NASDAQ:NVDA) shares fell 0.6% in after-hours trading Monday, while Advanced Micro Devices (NASDAQ:AMD) declined 0.5% following a report that U.S. officials are considering restrictions on exports of AI accelerators to companies in China. The moves in both stocks came after investors reacted to details about potential per-customer limits on high-end chips used for artificial intelligence workloads.
Details of the proposed limits
The report said the Trump administration has discussed a proposal that would limit purchases by individual Chinese firms to 75,000 units of Nvidia's H200 accelerators. Under the plan, shipments of AMD's MI325 accelerators - which are described as having comparable capabilities - would also be included when determining whether a customer has reached its cap, according to people familiar with the discussions.
That per-customer figure is reported to be less than half of the quantities some large Chinese cloud and tech firms privately told Nvidia they hoped to buy. Companies named as having sought higher volumes include Alibaba Group Holding and ByteDance, and the accelerators in question are used to develop and run artificial intelligence models.
Aggregate limits and concentration of demand
Even with per-customer ceilings, total shipments of these accelerators to China could still reach as many as a million units, the report said, citing an upper bound the Trump administration set earlier in the regulatory process. The current wave of applications for these chips is concentrated: a relatively small number of Chinese technology giants account for the large majority of requests. Under a per-customer cap framework, those firms together could receive at most several hundred thousand units.
Implications for markets and sectors
The immediate market impact was reflected in modest declines in the share prices of major chip suppliers whose accelerators are central to training and running advanced AI systems. The semiconductor equipment and cloud services sectors would be among those watching how final rules are framed, given the reliance on accelerators for AI model development and deployment.
Note on reporting - Details above are drawn from the report and descriptions provided by people familiar with the matter, as summarized in the account shared with market participants.