US blocks NVIDIA H200 sales to China; semiconductor exporters face 2-3% selloff

A dramatic reversal in US-China trade dynamics hit semiconductor stocks hard on May 15. According to social media traders and breaking news, the White House moved to block NVIDIA's H200 chip sales to China, reversing what traders had assumed was permitted under prior agreements. The H200 is NVIDIA's flagship AI accelerator for inference, and China represents roughly 25% of NVIDIA's annual revenue, making the ban a material headwind.

NVIDA fell 2.2% while AMD slumped 3.3% on the news. Broadcom (AVGO), which supplies networking components for data centers, faced pressure as well, as the constraint on Chinese AI buildout reduces demand for AI infrastructure components. The selloff coincided with Samsung's weakness in Korean markets due to North Korea tensions, spilling into US technology futures and adding to the downward pressure.

The narrative is nuanced: domestic US AI capex remains robust. Meta signed a USD 21 billion agreement with CoreWeave for inference capacity, and Cerebras Systems priced its IPOInitial Public Offering - a company's first public sale of stock. at USD 5.55 billion, showing that US data centers are racing to build out long-term inference infrastructure. However, the China ban removes a critical revenue pillar for NVIDIA and raises questions about whether prior export assumptions were priced into valuations.

Trump's trade team framed the ban as part of broader US-China competition, not capitulation. Trade Representative Jamieson Greer signaled willingness to negotiate agricultural purchases and energy deals, but made clear that AI chip restrictions remain a non-negotiable national security boundary. Analysts debate whether the ban accelerates Chinese domestic chip development (e.g., Huawei alternatives) or simply delays NVIDIA's China upside.