Allllrighty Then! Nvidia's China Chip Blockade: Is the AI Party Over?

Holy Testicle Tuesday! A Chip Off the Old Block(ade)

Greetings gentle beings! Ace Ventura Pet Detective here diving headfirst into the digital jungle! Nvidia those whippersnappers of graphics processors are seeing their AI party pooped by none other than Uncle Sam! Turns out some buzzkill named Trump (ring a ding DONG) sent a letter saying 'NO SOUP FOR YOU!' on their H20 chip exports to China. This is like telling me I can't have my beloved pigeon droppings… I mean important evidence! Suddenly growth is slowing faster than you can say 'Laces out Dan!'

Khaaaaaaan! China's Counterattack!

Now the U.S. government is all worried that these AI chips are gonna turn into super duper computers for… wait for it… EVIL MILITARY PURPOSES! Cue dramatic music. Apparently Biden is on board too. The new restrictions are causing Nvidia to take a $5.5 billion writedown. That's a LOT of chew toys people! According to some analyst dude at BNP Paribas this could mean a $15 BILLION revenue hit. Someone get me a tranquilizer dart!

66%? Can Doooo!

For the quarter analysts are expecting Nvidia to report 66% revenue growth. Still great but a far cry from last year's 250% explosion! It's like going from a rocket ship to a… slightly less fast rocket ship. And because of these export license shenanigans everyone's guessing about the rest of the year. Uncertainty? That's my middle name! (It's actually Finkle but don't tell anyone.)

Surprise Surprise Surprise!

Morgan Stanley those brainy cats say Nvidia was totally blindsided by this. They thought the H20 chip would be A OK! Apparently Huang (Nvidia's Big Kahuna) said they used to own 95% of the Chinese GPU market but now it's down to 50%. That's like losing half my animal crackers… this is a disaster! Nvidia filed with the SEC that $17.1 billion in annual sales came from China. This could truly affect them.

The Huang Ultimatum: If I Can't Have It No One Can!

Huang is saying these restrictions will only push China to develop their own chips threatening U.S. technological dominance. Basically he's saying 'If I can't sell them chips they'll just build their own and then WHERE WILL WE BE?' Good question pal! Luckily the Trump gang rescinded the "AI diffusion rule" which Nvidia and AMD opposed but don't think that they won't still put in new rules.

Waiting Game Shikkaka!

Morgan Stanley thinks the questions about Nvidia's China plans will linger long after this week's earnings report. Nvidia is even lobbying for licenses to ship the H20! It is unclear if they will get it. All I know is this whole situation is messier than a baboon's backside! Gotta wait and see what happens. Until then I'll be here solving pet mysteries and pondering the meaning of life… and maybe snacking on some pigeon droppings. Stay tuned!