Nvidia Drops 3.66% as U.S. Export Ban Hits Chinese Market

On April 21, 2025, Nvidia's stock dropped by 3.66% in pre-market trading, reflecting the ongoing challenges and uncertainties the company faces.

Nvidia's CEO, Jensen Huang, recently made his third trip to Beijing in three months, highlighting the company's strategic importance in the Chinese market. However, the U.S. government's sudden imposition of an indefinite export ban on Nvidia's H20 chip, designed specifically for the Chinese market, has led to significant disruptions. This ban has resulted in the cancellation of $55 billion worth of orders and a single-day market value loss of $1.3 trillion for Nvidia. The Chinese market, which contributes 29% of Nvidia's global revenue, is crucial for both AI applications and autonomous driving technologies.

Nvidia's flagship Thor chip, initially slated for mass production in 2024, has faced multiple delays and is now expected to be available only in a lower-performance version by 2026. The chip's advanced Blackwell architecture, designed for generative AI and large models, has encountered issues with yield rates and thermal efficiency during car-grade verification. These challenges, coupled with the U.S. export restrictions, have led to a loss of trust among Chinese automakers, who are now exploring domestic alternatives.

Domestic automakers are responding to Thor's delays by either relying on existing Nvidia Orin-X chips or developing their own solutions. Companies like Xiaopeng and NIO are accelerating their in-house chip development, while others like BYD and GAC are using dual Orin-X setups to maintain their advanced driver-assistance systems. Additionally, domestic chipmakers like Horizon and Huawei are gaining market share with their competitive offerings, further challenging Nvidia's position in the Chinese market.