Joe Biden Blocks Xi Jinping, American Giant Bites Tech’s Finger – 9 hours ago

Jakarta, CNBC Indonesia – The giant chip manufacturer in the United States has run out of steam. New rules from President Joe Biden’s administration caused US$ 5 billion to evaporate because chip orders from China were cancelled.

Reuters quote Wall Street Journal, stated that Chinese companies were busy canceling orders for chips made by Nvidia. The total value of canceled orders is estimated to be US$ 5 billion or around Rp. 79.68 trillion.

Companies that have canceled orders for AI chips made by Nvidia include Alibaba Group, TikTok’s parent, ByteDance, and Baidu, the company that owns a search engine similar to Google.


The White House led by Joe Biden announced a ban on the export of artificial intelligence chips designed by Nvdia and other companies to China. The aim is to prevent Xi Jinping’s government from accessing cutting-edge US technology which it fears could be used to build weapons systems.

This ban takes effect from November. Apart from China, similar restrictions also apply to chip exports to Iran and Russia.

An Nvidia spokesperson stated that demand for their AI chips is very high. Even though the chip manufacturing process takes a very long time, Nvidia is confident that it can allocate the chips that have been made to other customers, both in the United States and other countries.

“These new export controls will have no meaningful impact in the short term,” an Nvdia spokesperson said.

However, investors were busy selling Nvidia shares after news of the cancellation of orders from Alibaba Cs. Nvidia’s share price fell 4.7 percent to its lowest point since June, at US$ 392.3 per share. Nvidia’s share price has now fallen 20 percent from its highest point on August 31, namely US$ 493.55 per share.

Tom Plumb, an investment company that holds a lot of Nvidia shares, considers the selling trend in recent days to be excessive.

“Previously, Nvidia has said that this does not have a short-term but long-term impact. We expect this quarter’s performance to still be strong and consider the shares worth holding, although we are not adding to our holdings due to volatility,” said Plumb.

[Gambas:Video CNBC]

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