While trying to hinder China's growth in intricate artificial intelligence capabilities, the Trump administration has inadvertently impacted the stocks of U.S. semiconductor software companies. According to a Financial Times report, U.S. companies producing software for semiconductor designing have been told to discontinue serving Chinese customers. Consequently, shares of Cadence Design Systems and Synopsys plummeted by 10.7% and 9.6%, respectively.
The report emerged just as Nvidia announced its most recent quarterly financial results. Despite an earlier prediction, the restriction imposed on advanced chip exports to China by the White House resulted in a minor financial setback. Particularly, the restrictions impacted revenue associated with Nvidia's H20 chips designed in compliance with Biden-era restrictions, resulting in competitor Advanced Micro Devices anticipating an $800 million blow for similar reasons.
Jensen Huang, Nvidia CEO, criticized the U.S. export controls at an industrial conference recently, terming them "a failure." He cited reasons such as inspiring local technological companies to create sophisticated chips independently, subsequently diminishing the market share of U.S. firms without thwarting China's AI ambitions. Earlier this month, Trump repealed Biden's "AI diffusion rule," which would have expanded export restrictions and tightened existing controls. The administration announced plans to eventually introduce a rule preventing U.S.-made chips from reaching China via other countries.