Global chipmakers feel the pinch of Trump’s shifting trade policy

Global chipmakers feel the pinch of Trump’s shifting trade policy
An NVIDIA logo is displayed on a building in Taipei, Taiwan, on April 16, 2025. (REUTERS)
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Updated 17 April 2025
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Global chipmakers feel the pinch of Trump’s shifting trade policy

Global chipmakers feel the pinch of Trump’s shifting trade policy
  • Nvidia has warned of a $5.5 billion hit after Washington restricted exports of its AI processor tailored for China
  • Tightening US export curbs have in recent years made it harder for American chipmakers to tap the Chinese market

 

Global chip stocks were battered on Wednesday on fresh evidence of how US President Donald Trump’s shifting trade policy was complicating the outlook for semiconductor and computing giants, including AI pioneer Nvidia and its rival AMD.
Attempts to reorient global trade through tariffs and export curbs have started to show the effect as Nvidia warned of a $5.5 billion hit after Washington restricted exports of its AI processor tailored for China, while Dutch chip-making tools giant ASML raised doubts about its outlook.
The US restriction, which also hit the MI308 processor of Advanced Micro Devices, marked the latest blow for the AI chip trade that is losing steam after a two-year rally as tariff threats and fears over Big Tech’s spending weigh on sentiment.
Nvidia shares closed down nearly 7 percent on Wednesday, with the company losing more than $148 billion in market value. AMD fell 5.8 percent as it warned of a $800 million hit from the latest curb, while AI-related chip stocks including Arm, Broadcom and Micron dropped between 2.5 percent and 4.6 percent.
Nvidia said on Wednesday that it follows the US government’s directions on where it can sell its chips after the US Commerce Department announced on Tuesday it was issuing new export licensing requirements for Nvidia’s H20 chips.
“The US government instructs American businesses on what they can sell and where — we follow the government’s directions to the letter,” Nvidia said.
“The technology industry supports America when it exports to well-known companies worldwide — if the government felt otherwise, it would instruct us,” the company added.




Global stock markets mostly retreated Wednesday after the US government imposed restrictions on exports of a key Nvidia chip to China, the latest trade war salvo between the world's biggest economies. (AFP)

Tightening US export curbs have in recent years made it harder for American chipmakers to tap the Chinese market, but the country remains a key source of revenue.
“The US export restrictions on Nvidia’s H20 chips highlight the growing geopolitical uncertainty enveloping the tech and semiconductor sectors, particularly under Trump-era-style policy reversals,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.
“This unpredictability rattles businesses and investment markets, as evidenced by Nvidia’s selloff this morning and broader pressure across chip stocks.”
Nvidia drew over 13 percent of its sales, or about $17 billion, from China in its last financial year, although that was down from 21 percent in fiscal 2023. For AMD, China was its second-largest market last year, accounting for more than 24 percent of total sales.
“The H20 portion was about $12 billion or so (of the total China revenue), roughly about 30 cents of earnings per share, not trivial but not enormous in the grand scheme of things,” Bernstein analyst Stacy Rasgon said.
“H20 performance is low, well below already-available Chinese alternatives; a ban essentially simply hands the Chinese AI market over to Huawei.”
Rasgon said the move may have surprised many investors as shares had surged nearly 18 percent last week, partly due to a report that the Trump administration planned to back off from such a curb after CEO Jensen Huang attended a Mar-a-Lago dinner.
The company had earlier this week unveiled plans to build AI servers worth as much as $500 billion in the US over the next four years, a move largely seen as an overture to Trump.
Trump has for now exempted semiconductors and some other electronics from his tariffs, but he has warned that sector-specific levies will be announced in the coming weeks.
Such tariffs could cost US semiconductor equipment makers more than $1 billion a year, Reuters reported on Tuesday.

NVIDIA fallout
News of the latest export curb on Nvidia sparked a selloff in chip companies and its suppliers across the globe.
In South Korea, Samsung closed down about 3 percent, while SK Hynix closed 4 percent lower.
European chipmakers ASM International and Infineon Technologies fell more than 2 percent, while Japanese chip-testing equipment maker Advantest — an Nvidia supplier — was the Nikkei’s second-worst performer with a 5 percent tumble.

Still, some analysts said Nvidia’s overall sales have continued to surge even as the China contribution slows while chip demand remains strong from big cloud companies.
“While we acknowledge the likely impact to near-term numbers, we would stress that Blackwell shipments to core hyperscale customers remains the driver of fundamentals,” TD Cowen analysts said, referring to Nvidia’s latest line of AI systems.
 


Why was Elon Musk’s AI chatbot Grok preoccupied with South Africa’s racial politics?

Why was Elon Musk’s AI chatbot Grok preoccupied with South Africa’s racial politics?
Updated 16 May 2025
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Why was Elon Musk’s AI chatbot Grok preoccupied with South Africa’s racial politics?

Why was Elon Musk’s AI chatbot Grok preoccupied with South Africa’s racial politics?
  • Musk and his companies haven’t provided an explanation for Grok’s responses

Much like its creator, Elon Musk’s artificial intelligence chatbot Grok was preoccupied with South African racial politics on social media this week, posting unsolicited claims about the persecution and “genocide” of white people.
The chatbot, made by Musk’s company xAI, kept posting publicly about “white genocide” in response to users of Musk’s social media platform X who asked it a variety of questions, most having nothing to do with South Africa.
One exchange was about streaming service Max reviving the HBO name. Others were about video games or baseball but quickly veered into unrelated commentary on alleged calls to violence against South Africa’s white farmers. Musk, who was born in South Africa, frequently opines on the same topics from his own X account.
Computer scientist Jen Golbeck was curious about Grok’s unusual behavior so she tried it herself, sharing a photo she had taken at the Westminster Kennel Club dog show and asking, “is this true?”
“The claim of white genocide is highly controversial,” began Grok’s response to Golbeck. “Some argue white farmers face targeted violence, pointing to farm attacks and rhetoric like the ‘Kill the Boer’ song, which they see as incitement.”
The episode was the latest window into the complicated mix of automation and human engineering that leads generative AI chatbots trained on huge troves of data to say what they say.
“It doesn’t even really matter what you were saying to Grok,” said Golbeck, a professor at the University of Maryland, in an interview Thursday. “It would still give that white genocide answer. So it seemed pretty clear that someone had hard-coded it to give that response or variations on that response, and made a mistake so it was coming up a lot more often than it was supposed to.”
Musk and his companies haven’t provided an explanation for Grok’s responses, which were deleted and appeared to have stopped proliferating by Thursday. Neither xAI nor X returned emailed requests for comment Thursday.
Musk has spent years criticizing the “woke AI” outputs he says come out of rival chatbots, like Google’s Gemini or OpenAI’s ChatGPT, and has pitched Grok as their “maximally truth-seeking” alternative.
Musk has also criticized his rivals’ lack of transparency about their AI systems, but on Thursday the absence of any explanation forced those outside the company to make their best guesses.
“Grok randomly blurting out opinions about white genocide in South Africa smells to me like the sort of buggy behavior you get from a recently applied patch. I sure hope it isn’t. It would be really bad if widely used AIs got editorialized on the fly by those who controlled them,” prominent technology investor Paul Graham wrote on X.
Graham’s post brought what appeared to be a sarcastic response from Musk’s rival, OpenAI CEO Sam Altman.
“There are many ways this could have happened. I’m sure xAI will provide a full and transparent explanation soon,” wrote Altman, who has been sued by Musk in a dispute rooted in the founding of OpenAI.
Some asked Grok itself to explain, but like other chatbots, it is prone to falsehoods known as hallucinations, making it hard to determine if it was making things up.
Musk, an adviser to President Donald Trump, has regularly accused South Africa’s Black-led government of being anti-white and has repeated a claim that some of the country’s political figures are “actively promoting white genocide.”
Musk’s commentary — and Grok’s — escalated this week after the Trump administration brought a small number of white South Africans to the United States as refugees Monday, the start of a larger relocation effort for members of the minority Afrikaner group as Trump suspends refugee programs and halts arrivals from other parts of the world. Trump says the Afrikaners are facing a “genocide” in their homeland, an allegation strongly denied by the South African government.
In many of its responses, Grok brought up the lyrics of an old anti-apartheid song that was a call for Black people to stand up against oppression and has now been decried by Musk and others as promoting the killing of whites. The song’s central lyrics are “kill the Boer” — a word that refers to a white farmer.
Golbeck believes the answers were “hard-coded” because, while chatbot outputs are typically very random, Grok’s responses consistently brought up nearly identical points. That’s concerning, she said, in a world where people increasingly go to Grok and competing AI chatbots for answers to their questions.
“We’re in a space where it’s awfully easy for the people who are in charge of these algorithms to manipulate the version of truth that they’re giving,” she said. “And that’s really problematic when people — I think incorrectly — believe that these algorithms can be sources of adjudication about what’s true and what isn’t.”


Rubio says NATO members will agree to 5 percent defense spending over next decade by June summit

Rubio says NATO members will agree to 5 percent defense spending over next decade by June summit
Updated 16 May 2025
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Rubio says NATO members will agree to 5 percent defense spending over next decade by June summit

Rubio says NATO members will agree to 5 percent defense spending over next decade by June summit
  • US President Donald Trump cut defense funding to NATO during the latter part of his first term

WASHINGTON: US Secretary of State Marco Rubio said on Thursday that all NATO members will have agreed on a goal of spending the equivalent to 5 percent of GDP on defense over the next decade by the 2025 NATO Summit in June.
He made the comments while appearing on Fox News’ “Hannity.”
US President Donald Trump cut defense funding to NATO during the latter part of his first term in 2017-21, and has frequently complained that the US is paying more than its fair share.
“I can tell you that we are headed for a summit in six weeks, in which virtually every member of NATO will be at or above 2 percent but more importantly, many of them will be over 4 percent and all will have agreed on the goal of reaching 5 percent over the next decade,” said Rubio.
German Foreign Minister Johann Wadephul said this week that Berlin backed a demand by Trump for members of the defense alliance to increase defense spending to 5 percent of gross domestic product .
Germany in January said it met NATO’s target of spending 2 percent of its GDP on defense in 2024.
The 2025 NATO Summit will be held in the Netherlands from June 24-25.


US investigating ‘threat’ to Trump by ex-FBI chief Comey

US investigating ‘threat’ to Trump by ex-FBI chief Comey
Updated 16 May 2025
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US investigating ‘threat’ to Trump by ex-FBI chief Comey

US investigating ‘threat’ to Trump by ex-FBI chief Comey

WASHINGTON: US law enforcement agencies are investigating an alleged assassination threat against President Donald Trump by former FBI director James Comey, Homeland Security Secretary Kristi Noem said Thursday.
The announcement by Noem came after Comey made a now-deleted post on Instagram that showed an image of “86 47” spelled out in sea shells, with “86” being slang for kill and Trump the 47th president.
“Disgraced former FBI Director James Comey just called for the assassination of @POTUS Trump,” Noem posted on X.
“DHS and Secret Service is investigating this threat and will respond appropriately,” she said.
Comey later said on Instagram that he posted “a picture of some shells I saw today on a beach walk, which I assumed were a political message.”
“I didn’t realize some folks associate those numbers with violence. It never occurred to me but I oppose violence of any kind so I took the post down,” he said.
Trump was wounded in the ear during an assassination attempt that took place while he was holding a rally in Butler, Pennsylvania in July, and has faced other threats.

 


Putin ‘must pay the price for avoiding peace’ in Ukraine: Britain’s Starmer

Putin ‘must pay the price for avoiding peace’ in Ukraine: Britain’s Starmer
Updated 16 May 2025
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Putin ‘must pay the price for avoiding peace’ in Ukraine: Britain’s Starmer

Putin ‘must pay the price for avoiding peace’ in Ukraine: Britain’s Starmer

LONDON: British Prime Minister Keir Starmer said Russian President Vladimir Putin “must pay the price for avoiding peace” ahead of a European Political Community meeting in Albania on Friday.
“Putin’s tactics to dither and delay, while continuing to kill and cause bloodshed across Ukraine, (are) intolerable,” Starmer said in a statement ahead of the summit, taking place the same day talks are expected between Ukraine and Russia in Turkiye.
The European Political Community (EPC), which brings together the members of the European Union and 20 other countries, is meeting in the Albanian capital Tirana on Friday.
Russian and Ukrainian delegations are also due to meet in Istanbul for talks on ending the conflict in Ukraine.
However, neither Putin nor Ukrainian President Volodymyr Zelensky are expected to attend the talks, and US Secretary of State Marco Rubio has expressed skepticism that they will produce a peace breakthrough.
The EPC was established on the initiative of French President Emmanuel Macron in 2022 in response to Russia’s invasion of Ukraine.
Participants in the meeting will be “piling the pressure on the Kremlin... after Putin dodged US arranged peace talks in Istanbul yesterday,” according to Downing Street.
“A full, unconditional ceasefire must be agreed and if Russia is unwilling to come to the negotiating table, Putin must pay the price,” Starmer said.
London said Russian energy was expected to be a “central target in widespread sanctions action in the coming weeks if Russia does not agree a ceasefire.”
The EU and Britain on Wednesday have both approved fresh sanctions on Russia’s “shadow” oil fleet over the past few days.


Nose cone glitch wipes Australian rocket launch

Nose cone glitch wipes Australian rocket launch
Updated 16 May 2025
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Nose cone glitch wipes Australian rocket launch

Nose cone glitch wipes Australian rocket launch
  • The mishap happened before fueling of the vehicle at the company’s spaceport near the east coast township of Bowen

SYDNEY: An Australian aerospace firm said Friday it has scrubbed a historic attempt to send a locally developed rocket into orbit, citing a glitch in the nose cone protecting its payload — a jar of Vegemite.
An electrical fault erroneously deployed the opening mechanism of the carbon-fiber nose cone during pre-flight testing, Gilmour Space Technologies said.
The nose cone is designed to shield the payload during the rocket’s ascent through the Earth’s atmosphere before reaching space.
The mishap happened before fueling of the vehicle at the company’s spaceport near the east coast township of Bowen, about 1,000 kilometers  up from the Queensland capital Brisbane.
“The good news is the rocket and the team are both fine. While we’re disappointed by the delay, we’re already working through a resolution and expect to be back on the pad soon,” said chief executive Adam Gilmour.
“As always, safety is our highest priority.”
Gilmour said the team would now work to identify the problem on its 23-meter, three-stage Eris rocket, which is designed to send satellites into low-Earth orbit.
A replacement nose cone would be transported to the launch site in the coming days, he said.
Weighing 30 tons fully fueled, the rocket has a hybrid propulsion system, using a solid inert fuel and a liquid oxidiser, which provides the oxygen for it to burn.
If successful, it would be the first Australian-made rocket to be sent into orbit from Australian soil.
“We have all worked really hard so, yes, the team is disappointed. But on the other hand, we do rockets — they are used to setbacks,” said communications chief Michelle Gilmour.
“We are talking about at least a few weeks, so it is not going to happen now,” she told AFP.
The payload for the initial test — a jar of Vegemite — remained intact.
“It’s hardy, resilient, like Aussies,” she said.
Gilmour Space Technologies had to delay a launch attempt the previous day, too, because of a bug in the external power system it relies on for system checks.
The company, which has 230 employees, hopes to start commercial launches in late 2026 or early 2027.
It has worked on rocket development for a decade, and is backed by investors including venture capital group Blackbird and pension fund HESTA.