Nvidia Stock Drops on Report Huawei Is Developing Rival AI Chip

Nvidia (

NVDA

) shares led losses on the
Dow
and
S&P 500
Monday afternoon following a report China’s Huawei Technologies is preparing to test a rival
artificial intelligence
chip.

According to

The Wall Street Journal

, Huawei “is gearing up to test its newest and most powerful artificial-intelligence processor, which the company hopes could replace some higher-end products” from Nvidia.

Citing people familiar with the matter, the

Journal

said that “Huawei has approached some Chinese tech companies about testing the technical feasibility of the new chip, called the Ascend 910D.”

Shares of Nvidia, which declined to comment on the report, were down close to 4% in recent trading. They’ve lost a fifth of their value since the start of the year, and have yet to fully recover from their plunge on Jan. 27 that
wiped nearly $600 billion
from the company’s market cap when Chinese startup DeepSeek said its models rivaled those of
OpenAI’s Chat GPT
at a fraction of the cost.

Earlier this month, Nvidia said it is expecting to record
a $5.5 billion first-quarter charge
after the U.S. limited exports of its
H20 chips
to China.

This article has been updated since it was first published to reflect Nvidia declined to comment.

Read the original article on
Investopedia