Nvidia Stock Slips. This Is Hurting the AI Chip Maker.

Nvidia chips are the favored choice for training artificial-intelligence models. (Dreamstime)

Nvidia was falling early on Tuesday. Investors are weighing fears of a renewed trade war between the U.S. and China, and competition in artificial-intelligence chips.

Nvidia shares were down 2.1% at $184.41 in premarket trading. The stock rose 2.8% on Monday.

The move was broadly in line with the wider market and sector peers, after China’s transport ministry said Tuesday that it had launched an investigation into a U.S. probe into the Chinese shipping sector.

Among other chip makers, Advanced Micro Devices was down 1.9% and Broadcom was falling 2.9% in premarket trading.

Broadcom gained nearly 10% the previous day after announcing it was joining with ChatGPT-developer OpenAI to develop and deploy 10 gigawatts of custom AI accelerators.

That would match a similar deal reached between Nvidia and OpenAI last month. Nvidia agreed to supply 10 gigawatts of AI infrastructure to OpenAI, and said it would invest up to $100 billion in the AI start-up.

“This appetite for compute should drive others to drive higher capex spending forecasts since they need to compete too—so other Broadcom customers like Meta and Google are likely to spend more than expected,” wrote Melius Research analyst Ben Reitzes in a research note. “If you don’t have the compute, you don’t have a chance. To that end, Broadcom, Nvidia and AMD can all win.”

Meanwhile, Nvidia said late Monday, it would start shipping the DGX Spark, which it calls the “world’s smallest AI supercomputer” and said it would allow developers to create AI agents—programs that have the ability to take simple directions and complete multistep tasks—and run advanced software locally rather than via cloud computing.

Write to Adam Clark at adam.clark@barrons.com