Nvidia and AMD warned that the Commerce Department’s new export restrictions on computer chips could cost them billions of dollars — sending tech stocks tumbling and dragging down the rest of the markets with them.

Nvidia said it would be hit with $5.5 billion in charges due to the new regulations, which require US licenses to export advanced chips to China. While major chipmakers can apply for the export licenses, there is no guarantee they will be granted, meaning they could lose out on a crucial market.

Rival chip giant AMD said it could incur charges of up to $800 million “in inventory, purchase commitments and related reserves” to export its MI308 products to the country, according to an SEC filing.

Shares in Nvidia and AMD plunged 9.9% and 9.9%, respectively, by approximately 3:20 p.m. ET on Wednesday. The White House announced it was mandating the new licensing requirements on Tuesday.

The stricter rules on semiconductors are the Trump administration’s latest move to keep advanced chips from making their way to China to prevent the nation from building powerful supercomputers and edging ahead in the AI race.

“The Commerce Department is committed to acting on the President’s directive to safeguard our national and economic security,” a spokesperson for the department said in a statement.

The Dow Jones Industrial Average slid 912 points, or 2.3%, on Wednesday while the S&P 500 and Nasdaq dropped 3.1% and 4.3%.

Stocks had been on a rebound after a volatile week of trading, as President Trump’s back-and-forth on tariffs — unveiling stiff taxes and then pausing them for 90 days — spooked investors.

The White House has imposed a hefty 145% tax on goods from China, and temporarily lowered all other rates to 10% as the administration holds negotiations with several nations.

But warnings from Nvidia and AMD sent stocks on another decline, since the loss of Chinese customers could significantly hammer their businesses.

The H20 is an AI chip that was designed to pass stricter US export regulations enacted in 2022, under the Biden administration. Though the chip is slower and has less bandwidth than H100 and H200 models sold in the US, it’s still comparable to high-performing AI graphics processing units.

China’s DeepSeek — which rattled industry giants and markets with the launch of its competitive AI model earlier this year — used H20 chips in its research.

The chip generated an estimated $12 billion to $15 billion in revenue last year, and Chinese companies — including Tencent, Alibaba and ByteDance, which owns TikTok — had been ramping up their orders to keep up with demand after DeepSeek’s roaring debut, according to a Reuters report.

Nvidia was reportedly made aware of the incoming export rules last week, but did not warn some of its major customers in advance, sources familiar with the matter told Reuters.

Nvidia declined to comment.

Nvidia had secured $18 billion worth of H20 orders since the start of the year, according to the report. The H20 is the main chip it is legally allowed to sell to Chinese customers.

The latest chip export curbs could push Chinese firms to purchase chips from local competitors, like Huawei.

Costs for chipmakers in the US, meanwhile, are expected to soar due to Trump’s sweeping tariffs.

The new taxes could cost semiconductor equipment makers more than $1 billion a year, according to industry calculations discussed with White House officials, per a Reuters report.

The three largest US chip equipment manufacturers – Applied Materials, Lam Research and KLA – may lose roughly $350 million each per year, sources said.

Smaller rivals could also be slapped with tens of millions of dollars in additional costs.

With Post wires