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Nvidia and AMD Set to Benefit from Easing Export Restrictions to China
On October 3, 2023, the U.S. announced it would ease chip export restrictions to China, significantly benefiting Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD). Both companies’ stocks surged as they prepare to resume selling artificial intelligence (AI) chips in a previously restricted market. Nvidia anticipates resuming sales of its H20 GPUs, initially halted in April 2023 due to new licensing requirements, which could add billions in revenue. AMD expects to restart shipments of its MI308 AI chips once the Commerce Department resumes license reviews.
This policy reversal follows a recent meeting between Nvidia’s CEO Jensen Huang and President Donald Trump, signaling a shift in the administration’s approach towards tech trade with China. The easing of restrictions comes just weeks after agreements were made between Washington and Beijing regarding rare-earth exports, indicating a broader tech trade framework being developed.
In Q1 2023, Nvidia held a commanding 92% share of the GPU market. While AMD’s AI-related revenue lags behind Nvidia, the recent changes enhance AMD’s potential growth in the inference market, expanding its total addressable market.
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