Nvidia Corporation (NASDAQ:NVDA) shares are trading lower on Monday after Huawei announced it’s preparing a new artificial intelligence (AI) chip as an alternative to Nvidia’s H20 line.

The Details: Huawei plans to begin shipping its advanced 910C AI chip to customers in China as soon as next month, according to Reuters. The chip achieves performance on par with Nvidia's H100 chip by using two 910B processors combined into a single unit through advanced integration methods.

Last week, President Donald Trump's administration introduced licensing requirements for the sale of Nvidia’s H20 chips to China. A license will also be required for any chips that match the H20's memory bandwidth, interconnect bandwidth or a combination of both.

Nvidia shares may be lower as investors assess the competitive threat posed by Huawei and its novel chip. The recent export restrictions on Nvidia's H20 chips may also be fueling concerns about the company's ability to maintain its foothold in the Chinese market.

What Else: Deteriorating U.S.-China trade relations continue to weigh on the stock as well. For instance, the Trump administration has imposed a wide range of tariffs on China. In response, China has filed a complaint with the World Trade Organization.

Trump has now raised concerns about escalating tariffs, warning that they could further strain U.S.-China trade relations.

Such tensions add uncertainty for companies like Nvidia that rely on the Chinese market, where higher tariffs and regulatory hurdles could hurt sales and long-term growth.

Related Link: Tesla Rival BYD Targets Japan’s Minicar Market With For New Affordable EV

NVDA Price Action: At the time of writing, Nvidia stock is trading 6.30% lower at $95.10, according to data from Benzinga Pro.

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