Shares of Super Micro Computer Inc (SMCI) plummeted over 5% in pre-market trading on Monday, as chip stocks were broadly dragged down by the unveiling of new White House curbs on exports of advanced artificial intelligence (AI) chips.
The Biden administration announced sweeping restrictions on the sale of cutting-edge AI chips developed by companies like Nvidia Corp and others to most countries around the world. The limits, set to take effect in one year, will cap the amount of computing power that can be exported.
While businesses will have a way to bypass national limits by agreeing to certain security and human rights standards, the new rules have raised concerns about the potential impact on the semiconductor industry's future revenue and growth prospects. Companies like Super Micro that supply AI servers and systems could be significantly affected.
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