Nvidia shares fell 0.5% to $186.23 in premarket trading on Tuesday, January 20, 2026, following a warning from Taiwanese server manufacturer Inventec that shipments of the company's H200 AI chip to China face significant delays. The decline comes as U.S. markets reopened after the Martin Luther King Jr. holiday, with broader market futures also dipping amid rising global tensions.
The core issue centers on a regulatory standoff. While the United States officially authorized exports of the H200 AI chip to China under specific conditions last week, Chinese customs authorities have informed agents that the chip is "not permitted to enter the country." This creates an unusual reversal where the primary barrier is no longer U.S. export controls but rather approval from Beijing.
Inventec, which assembles AI servers incorporating Nvidia products for Chinese clients at its Shanghai facility, is directly impacted. Company President Jack Tsai stated, "Basically, the United States is open to it, but at the moment it appears to be stuck on the China side." He emphasized that the hold-up depends on political developments and that the company is prepared to comply with all regulations, leaving orders frozen despite strong demand from Chinese tech firms.
The H200 chip is Nvidia's second-most-powerful AI processor, designed for large-scale data processing and AI training. Its delayed entry into China could disrupt server orders and complicate supply chains for companies dependent on Nvidia's advanced hardware. The chip has become a major flashpoint in U.S.-China relations, with Beijing's motivations unclear. Analysts suggest China may be considering an outright ban to support domestic chipmakers, is still reviewing the U.S. conditions, or is using the issue as leverage in broader trade negotiations.
Investors are closely monitoring the situation, aware that even minor delays could affect Nvidia's revenue forecasts and short-term trading. The company is scheduled to release its Q4 fiscal 2026 earnings on February 25, where its performance in China is expected to play a significant role in sentiment. The ongoing uncertainty adds a layer of geopolitical risk to tech stocks, with chipmakers like Nvidia often acting as bellwethers for global trade sentiment.
