US allows Nvidia chip sales to company with empty China office — The Verge

The US has approved Nvidia's sales of AI chips to Chinese firms linked to blacklisted entities, according to reports. The approvals are for companies with no current use for the chips, raising questions about the policy's intent. Nvidia's H800 chip, a less powerful version of its AI chips, is among those approved for sale. The approvals come as the US seeks to limit China's access to advanced technology.

UBS estimates 30% of U.S. data-center capacity planned for 2028 may be at risk, impacting AI-related companies like NVIDIA (NVDA). NVIDIA's growth depends on new data centers, with Q2 2027 Data Center revenue at $89.023B, up 117% YoY. Shares fell 21.4% over the past month. Broadcom (AVGO) and others also cited supply constraints. Analysts debate NVIDIA's revenue estimates for 2028, ranging from $506.483B to $778.471B.

The US approved sales of Nvidia's H200 AI chips to Chinese firms, including some with ties to blacklisted entities, raising concerns about national security. Approved companies include Baidu, BYD, Tesla Shanghai, Alibaba, Tencent, and ByteDance. Nvidia defended its sales, stating China's military has little incentive to rely on US technology. The Commerce Department defended its screening process, citing penalties and enforcement efforts.

Memory chip makers like Micron, Sandisk, and SK hynix reported 80%+ margins due to AI-driven demand. TrendForce forecasts DRAM and NAND flash price increases. Apple's margins are pressured by memory costs, while Nvidia collaborates with TSMC for custom HBM.

OpenAI raised $11 billion at a $1.25 trillion valuation, below its initial $1.4 trillion target. The round is 37% of the original $30 billion goal, with potential follow-on funding. OpenAI's CFO cited 70% quarterly growth and 1.2 billion weekly ChatGPT users. Microsoft and NVIDIA are affected due to their dependencies on OpenAI's funding.

TSMC's US shares rose 6% after reports it may produce 3D DRAM memory chips for Nvidia, entering a market led by Samsung, SK Hynix, and Micron. TSMC confirmed no timeline, focusing on its core foundry business. The move could address AI hardware supply chain bottlenecks, but memory markets are cyclical.