NVIDIA’s booming AI business may be headed for turbulence as the Trump administration considers extending sanctions to Malaysia and Thailand, according to a fresh report from UBS.
The investment bank warns that while such moves could benefit American tech giants building local data centers, they might jeopardize NVIDIA’s significant revenue streams from these nations.
UBS highlighted that 12% of NVIDIA’s revenue currently comes from Malaysia, thanks to rising orders from domestic firms investing in sovereign AI infrastructure. However, if these firms fall under the scope of new U.S. sanctions, the revenue tap could tighten. The concern is amplified by fears of GPU transshipment to China-an issue that Washington is increasingly focused on controlling.
The sanctions come on the heels of similar measures that barred NVIDIA from selling China-specific AI chips, prompting CEO Jensen Huang to embark on a global tour. His goal? Stir up international demand for ‘sovereign AI’-AI computing systems hosted and run domestically. Huang’s pitch landed well, pushing NVIDIA’s stock up 45% from May to June and reclaiming its title as the world’s most valuable company.
But UBS warns the good times might not last. The recent rally in tech stocks, they argue, stems more from inflated investor optimism than solid earnings growth. If new sanctions introduce supply volatility or earnings misses, the house of cards could wobble. AMD, for example, saw its stock drop 2% in response to similar concerns.
Not all is gloomy, though. American companies like Microsoft and Oracle, operating data centers in Malaysia and Thailand, could benefit from the crackdown, as long as they’re aligned with U.S. interests. UBS suggests that firms working on U.S.-backed projects will likely dodge the worst of the restrictions.
In the grand game of AI geopolitics, NVIDIA finds itself both a star and a target. Whether it can navigate yet another round of export controls while maintaining its golden growth trajectory remains to be seen-but if Jensen Huang’s global hustle is any indication, the fight is far from over.