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Good morning and welcome back to FirstFT Asia. In today’s newsletter:
Nvidia gets caught in the US-China trade war
EU carmakers seek Chinese expertise
Turkey’s opposition leader writes from his prison cell
Nvidia has been caught by surprise by Donald Trump’s new export controls on its best-selling artificial intelligence chip in China, leaving the chipmaker and its clients to assess the damage caused by the US president’s latest salvo in an escalating trade war.
Multibillion-dollar blow: The $2.7tn semiconductor giant revealed a $5.5bn charge on Tuesday night related to new US controls on its sales to China. However industry insiders believe the hit on Nvidia’s revenue could reach more than $10bn.
How Nvidia was blindsided: The US chipmaker Intel told its Chinese clients last week that sales of some of their advanced AI processors would start to require a licence, according to a company email reviewed by the Financial Times and people with knowledge of the discussions. Nvidia had thought its H20 graphics processing unit — a less powerful version of its AI chips designed to meet Washington’s previous export controls — could potentially be exempted from requirement, said two people with knowledge of the situation.
After a meeting with Trump at his Florida residence at Mar-a-Lago earlier this month, Nvidia executives were left with the impression they could escape tougher enforcement of any curbs, the people said, adding the company’s plan to invest $500bn in the US had also impressed the president. This led Nvidia to tell Chinese clients, including tech giants Alibaba, ByteDance and Tencent, that orders of H20s would not be affected, the people said.
Nvidia was then blindsided as Trump decided to clamp down on the export of H20, a product that Chinese tech groups have relied upon in their efforts to challenge their global peers to develop large language models.
Here’s how Nvidia’s China business will be affected by the latest US restrictions.
More Nvidia news: The US House of Representatives China committee has asked Nvidia to explain whether and how Chinese company DeepSeek obtained export-controlled chips to power its AI app, which lawmakers say poses a national security threat.
Chipmaker shares sink: Tech stocks led a Wall Street sell-off yesterday after Nvidia revealed the multibillion-dollar hit to its earnings, dragging its peers sharply lower.
Chinese eCommerce giants slash US ad spending: Temu and Shein have cut their US spending on advertising platforms, as they wrestle with the end of tax exemptions that have helped them undercut rivals such as Amazon.
Here’s what else we’re keeping tabs on today:
Economic data: Japan reports March trade statistics, New Zealand releases first-quarter inflation data and Australia publishes monthly employment figures.
US-Japan trade talks: Japan’s top trade negotiator has travelled to Washington for talks over Trump’s tariffs, in one of the first tests of the White House’s willingness to strike deals on the levies.
Chagee IPO: The Chinese tea company is set to brave choppy market conditions and an intensifying trade war as it seeks to raise almost $400mn on its New York debut today.
South Korea rate decision: The Bank of Korea is likely to hold its interest rate steady, according to economists surveyed by Bloomberg.
Companies: Taiwan Semiconductor Manufacturing Company and Infosys report their latest results.
Five more top stories
1. The Trump administration has imposed sanctions on a Chinese refinery for buying Iranian crude oil, as Washington increasingly pushes Beijing to rein in oil purchases from the country. The measures targeting Shandong Shengxing Chemical mark the second time in a month that the US has put sanctions on a “teapot” refinery — a term for independent Chinese refineries that are the main buyers of Iranian crude.
2. China’s economy grew at a robust 5.4 per cent in the first quarter of this year as producers frontloaded exports to beat a blitz of tariffs from Trump. The growth exceeded Beijing’s full-year target for 2025 as well as the 5.1 per cent forecast by analysts in a Reuters poll.
3. Trump’s tariffs are “likely” to put at risk the Federal Reserve’s goals of keeping prices and unemployment in check, chair Jay Powell warned, as he emphasised the US central bank’s focus on inflation. Powell said in remarks to the Economic Club of Chicago that “without price stability, we cannot achieve long periods of strong labour market conditions.”
Related news: Trump’s tariff war will reduce North American exports by almost 13 per cent this year, the World Trade Organization has warned.
4. Gerry Cardinale’s RedBird Capital Partners is drawing up plans to take control of The Telegraph, people briefed about the matter said. Under plans still being evaluated, the US private equity firm would reduce the stake of Abu Dhabi-based IMI in order to overcome objections from the UK government over having overseas sovereign wealth owning a majority of a British newspaper. Here’s what else we know.
5. PwC has ceased operations in more than a dozen countries that its global bosses have deemed too small, risky or unprofitable, including cutting ties with several member firms in francophone Africa. Stephen Foley has more details on the Big Four firm’s push to avoid further scandals.
The Big Read
Two decades ago, German car engineers used to joke that their Chinese joint venture partners had no original ideas. Now, the tables are turning. In a new approach being developed by the EU and industry, Europe is seeking to take advantage of Chinese expertise, with one executive saying: “We’ve come full circle.”
We’re also reading . . .
The ghosts of ‘poor India’: Satyajit Ray’s “Apu Trilogy” has found a new audience with young cinemagoers more accustomed to Bollywood bling, writes Andres Schipani.
Turkey: Istanbul mayor Ekrem İmamoğlu, arrested last month and writing from prison, explains why his country’s democratic future matters to the world.
The betrayal of Ukraine: The Trump administration’s falsehoods over the war are doing profound damage to America’s global standing, writes Alec Russell.
Chart of the day
India is betting on the tradition of “frugal innovation” and its huge tech talent pool to catch up in the global artificial intelligence arms race. But for the country to have a chance to draw level in a field dominated by the US and China, Indian companies need to take larger bets to fund innovation, according to executives and policymakers.
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