Nvidia’s stock surged on Monday as it unveiled tools and readied new artificial intelligence chips designed for the China market, despite a warning from Beijing that the U.S. was squandering its market opportunities in China.
The AI company’s stock price touched record highs on Monday, outdoing its 2023 performance that lifted the company into the trillion-dollar market capitalization club in May. The soaring stock market performance occurred as the China-affiliated Global Times trumpeted word that trouble loomed for Nvidia.
The stock for the Santa Clara, California-based company shot up $31.56 to close at a record $522.53 Monday, up 6.43%.
Nvidia’s new tools include products for developers to build AI models, such as a forthcoming AI toolkit, and fresh uses for AI in video games, such as using generative AI to create digital avatars for games and apps.
“Generative AI is the single most significant platform transition in computing history and will transform every industry, including gaming,” Nvidia CEO Jensen Huang said in a statement. “With over 100 million RTX AI PCs and workstations, Nvidia is a massive installed base for developers and gamers to enjoy the magic of generative AI.”
The company announced its newest products from CES, the consumer electronics show, in Las Vegas, where it is showing off its new AI-powered tools for gaming and digital graphics. Its stock reached an all-time high on Monday, up more than 4% during trading, according to CNBC.
Nvidia’s stock was a top performer in the S&P 500’s index last year and it started the 2024 calendar year with lofty expectations. The chances that Nvidia may replicate its success again this year are threatened by new export restrictions from the Biden administration dealing with high-tech exports to the China market, and the sharp reaction that has generated in Beijing.
Commerce Secretary Gina Raimondo said in December that the “cranky” CEOs of chip companies could be in for a “tough quarterly shareholder call” because of the export curbs, but argued they are necessary in the long run to protect U.S. national security.
Speaking at the Reagan National Defense Forum, Ms. Raimondo warned chip makers that if their products enable China to win an AI advantage then she would look to control them immediately.
After Nvidia designed a new chip product for the Chinese market, Chinese companies indicated they would buy fewer Nvidia chips and turn to domestic high-tech giant Huawei instead, according to the Wall Street Journal.
The Global Times said in an analysis posted Monday that Chinese companies were unhappy with Nvidia’s new design and said the Biden administration was sacrificing American semiconductor companies’ interests in the service of its bullying behavior.
“China is steadily beefing up its chip industry, with progress made in artificial intelligence (AI), proving that the U.S. government’s scheme of crippling China’s AI development is failing,” the Global Times said. “With U.S. chip firms forced to lose the Chinese market, as well as a significant portion of their revenue, U.S. technology companies will gradually lose their global technological lead, Chinese analysts noted.”
American AI makers and tech titans do not appear publicly afraid of China’s dire predictions, yet. Nvidia intends to begin large-scale production of its chip for China in this year’s second quarter, according to Reuters on Monday.
Nvidia is also among the tech leaders betting big on Perplexity, an AI startup looking to upend Google’s dominance over the internet search marketplace. Perplexity, the maker of an AI research assistant, said last week it raised $73.6 million from a group of investors including Nvidia, billionaire Amazon founder Jeff Bezos and others.
• Ryan Lovelace can be reached at rlovelace@washingtontimes.com.
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