By bigbreakingwire 
U.S. President Trump is considering new restrictions on Nvidia, potentially preventing the company from selling its chips to China. This move comes as competition from the Chinese AI company DeepSeek has raised concerns. As a result, Nvidia’s stock has fallen nearly 7%, hitting its lowest point of the day.
U.S. officials are considering expanding existing restrictions to include Nvidia’s H20 chips, a smaller AI processor that currently meets U.S. export control rules. Despite these limits, Nvidia made nearly $10 billion in revenue from China in 2024. If the new restrictions are enforced, Nvidia’s sales could drop, and it might speed up China’s efforts to produce its own AI chips.
Howard Lutnick, the nominee for Commerce Secretary, has stressed the importance of strict semiconductor restrictions, though no decisions have been made yet. These talks come amid growing concerns over China’s progress in AI, especially after DeepSeek developed an AI model using older Nvidia chips at a significantly lower cost, posing a challenge to U.S. tech companies.
Meanwhile, hedge funds that focus on stock-picking based on company performance faced significant losses on Monday. This was triggered by the launch of a budget-friendly Chinese AI model that posed a challenge to U.S. companies. A Goldman Sachs trading update revealed that these funds experienced a 1.1% drop in just one day, which is a substantial loss for funds that typically see annual returns around 15%.
Goldman Sachs did not provide specific figures on the hedge funds they track, but according to BarclayHedge, the total losses could amount to billions. As of the third quarter of 2024, hedge funds managing long and short positions held $176.7 billion in assets, while long-only funds managed $672.9 billion.
In addition to these losses, Nvidia experienced an unprecedented 17% drop in its stock on Monday, resulting in a $600 billion loss in market value. This marked the largest single-day drop in Nvidia’s history. During this dramatic selloff, short-sellers made huge profits, with some earning $6.6 billion in just one day. Other companies, including Broadcom, Super Micro, Equinix, and Vistra, also saw short-sellers making substantial gains, with Broadcom shorts earning over $2 billion.
Update
Nvidia has expressed its readiness to collaborate with the U.S. government in shaping its AI strategy, underscoring its pivotal role in the AI industry by providing essential chips and infrastructure. As the company faces growing regulatory scrutiny, its willingness to work closely with federal policies could influence the future of AI deployment and security.
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[…] President Trump is considering halting Nvidia’s chip sales to China due to competition from DeepSeek. The stock has fallen to its lowest point of the day, down nearly 7%. […]