Nvidia higher on reports it will unveil new AI chips for China following US export restrictions

Updated at 8:48 am EST

Nvidia NVDA shares edged higher Thursday following reports that the tech group is ready to unveil a new series of AI chips, designed for customers in China, that will comply with new exports rules imposed by the U.S. government. 

The Financial Times reported that Nvidia may announce the release of the new chips, called HGX H20, L20 PCIe and L2 PCIe, as early as next week, following the acceleration of restrictions on high-tech exports by U.S. companies to China-based customers unveiled last month by Trade Secretary Gina Raimondo.

China's Star Market Daily, a media group tied to the state-backed STAR Market, China's equivalent to the Nasdaq, also reported Nvidia's chip plans.

The new restrictions, which expand upon new export rules put in place last year, are designed to limit China's access to "advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to (Chinese) military applications," Raimondo said.

The rules also address a loophole in the previous restrictions, which allowed Nvidia to sell its A800 and H800 semiconductors, by focusing on overall performance as opposed to the computing power of individual chips.

Nvidia CEO Jensen Huang told the FT last spring that the U.S. risked "enormous damage" to its tech sector as a result of tighter China restrictions, saying the new rules would “cut the Chips Act off at the knee”.

"If China can’t buy from the United States, they’ll just build it themselves," Huang told the paper. "So the US has to be careful. China is a very important market for the technology industry.”

Nvidia noted in a Securities and Exchange Commission filing in October, however, that "given the demand worldwide for our products, we don’t expect a near-term meaningful impact on our financial results" as a result of the new U.S. restrictions. 

Nvidia shares were marked 2% higher in pre-market trading to indicate an opening bell price of $475.15 each.

• Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.