What's Going On With Nvidia Stock Tuesday?

The impact of the latest U.S. embargo on China regarding AI technology triggered a selloff in Nvidia Corp NVDA stock Tuesday. 

China's leading AI and cloud-computing companies, like Alibaba Group Holding Limited BABA, and TikTok parent ByteDance, had placed orders to deliver AI chips worth over $5 billion in 2024.

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Nvidia had maintained that the sanctions do not affect the chip designer's short-term revenue. Analysts say China represented 20% - 25% of Nvidia's data center revenues. 

Meanwhile, the ace chip designer unveiled its innovative research on utilizing chatbots for semiconductor design. 

These chatbots can produce human-like responses, revolutionizing the intricate chip design process.

Designing modern chips, which consist of billions of transistors, is a challenging task that often requires the expertise of thousands of engineers over a span of two years, Reuters reports. 

Nvidia showcased its research where a large language model, the backbone of chatbots, was enhanced with three decades of data from Nvidia's chip design archives. 

This approach uses the company's extensive experience to assist junior designers. As Nvidia's chief scientist, Bill Dally, explained, by introducing a chatbot protocol, senior designers can save considerable time.

The research highlighted that a chatbot, when fed with specific data from Nvidia's vast experience, could outperform even the most advanced chatbots in accuracy. 

This method not only ensures precision but also helps in managing the system's cost-effectiveness.

Another intriguing feature introduced by Nvidia is the use of artificial intelligence to generate code. 

Dally emphasized that engineers often invest much time identifying malfunctioning chip parts and determining the cause. Now, AI systems can swiftly create a code script to operate the testing tool.

Despite these advancements, Nvidia maintained that it does not look to replace human expertise and enhance its capabilities. 

Price Action: NVDA shares traded lower by 2.24% at $402.28 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.