Tuesday, May 21, 2024

Nvidia in Spotlight as Chinese Tech Giants Push for Domestic AI Solutions

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Nvidia Corp NVDA remained at the forefront of investor attention Monday amid reports of Chinese regulators instructing local tech firms to reduce their consumption of the key U.S. artificial intelligence chip designer.

China urged domestic tech firms, including TikTok parent ByteDanceTencent Holding Ltd TCEHYAlibaba Group Holding Limited  BABA, and Baidu Inc BIDU, to invest in more domestically made AI chips instead, the Information cites familiar sources. 

Also Read: Is Nvidia Benefiting From US Sanctions On China?

In 2023, the U.S. imposed strict restrictions on the import of advanced artificial intelligence chips from companies like Nvidia and Advanced Micro Devices, Inc AMD to China as geopolitical tensions intensified between the countries since the pandemic outbreak.

Recently, Alibaba co-founder and chairman Joe Tsai expressed how the U.S. embargo had affected its cloud business and its capability to provide high-end computing services. 

Meanwhile, separate reports indicated that Intel and Nvidia are launching tailor-made AI chips to cater to the Chinese market, following China’s instructions to domestic telecom operators to eliminate foreign processors by 2027.

Nvidia stock gained over 209% in the last 12 months. Investors can gain exposure to the stock via VanEck Semiconductor ETF SMH and Global X Robotics & Artificial Intelligence ETF BOTZ.

Price Action: NVDA shares traded higher by 0.25% at $901.04 at the last check Monday.

Also Read: Nvidia Eyes Continued Leadership in $90B Accelerator Market, Despite Recent Dip: BofA Analyst

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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