NVIDIA stock slumped on Friday due to a reported delay in launching its highly anticipated artificial intelligence (AI) chip for the Chinese market, which would comply with the latest U.S. export restrictions.
The H20 chip was considered the most powerful among the three semiconductors the company planned to introduce after President Biden signed an executive order in August limiting investments in China for sensitive technologies crucial to national security in three sectors: semiconductors, microelectronics, quantum information technologies, and artificial intelligence.
The H20 chip was initially speculated to hit the market this month. However, insiders revealed that the launch is now postponed to the first quarter of 2024, primarily due to challenges faced by server makers in integrating the H20 chip.
Meanwhile, sources indicated that another chip in the lineup, the L20, was unaffected by delays and is expected to be released as planned. The status of the third chip, known as L2, remains unclear at this point.
NVIDIA Corporation (NASDAQ: NVDA) shares had been on an upward trajectory, reaching an all-time high just last Monday amid surging demand for its AI semiconductors. However, the stock took a hit following the release of its quarterly earnings report, where the company acknowledged that the new export rules related to China would have a negative impact on its current quarter results.
NVIDIA stock fell about 2% to $477.76 on Friday, reflecting investor concerns over the delayed launch and the broader implications of geopolitical tensions on the semiconductor industry.