Nvidia shares slid over 5% on Wednesday following a report that Chinese environmental regulations could restrict the company’s sales in China. The decline came as tech stocks broadly retreated on growing concerns over escalating US-China trade tensions.
The Financial Times reported that Chinese regulators are urging companies to adopt data centre chips that meet stringent environmental standards—standards that exclude Nvidia’s H20 chip, designed to comply with US export controls.
In response, a Nvidia spokesperson said the firm’s products offer “superb energy efficiency” and called for updates to export control policies to support both environmental goals and US national security interests.
The news adds to pressure from ongoing trade friction, with Washington recently imposing further tariffs on Chinese goods. Restrictions on advanced chip exports have remained a flashpoint in US-China relations.
Also weighing on markets, analysts at TD Cowen reported Microsoft has cancelled data centre projects in the US and Europe, stoking fears of reduced AI infrastructure spending. However, the analysts noted that Google and Meta are stepping in to absorb some of the vacated capacity.
Nvidia led declines among the so-called “Magnificent Seven” tech stocks, ending a brief rebound after recent corrections in both the S&P 500 and Nasdaq. Investor caution around inflated AI valuations has grown since January, when Chinese startup DeepSeek unveiled a competitive chatbot, and further weakened earlier this month after Marvell Technology’s underwhelming outlook.
Nvidia shares are down approximately 15% so far this year.
