Nvidia says it is not sending GPU designs to China after reports of new Shanghai operation

Artificial intelligence (AI) chipmaker Nvidia is reportedly planning to build a research and development center in Shanghai to meet U.S. export restrictions while catering to the local market.

The move comes as the U.S. began cracking down on sending advanced chips to China in 2022.

Nvidia CEO Jensen Huang discussed the potential new center with Shanghai's Mayor Gong Zheng during a visit last month.

The center will assess ways to meet U.S. restrictions while catering to the local market, although production and design will continue outside China.

Nvidia has been hit with major China roadblocks since 2022 as the U.S. began cracking down on sending advanced chips to China due to concerns of security risks.

The Biden administration set up so-called AI diffusion rules to prevent shipments to other countries from being diverted to China, which President Donald Trump has decided to cancel.

Nvidia's hardware is too large to be easily smuggled across borders and its customers are aware of the rules and self-monitoring, Huang said.

Reference Sources

1. cnbc - Nvidia says it is not sending GPU designs to China after reports of new Shanghai operation
2. fortune - Nvidia CEO sees no evidence of AI chip diversion into China
3. aawsat - Report: Nvidia Plans China Research Center as Export Curbs Bite
4. cna - Nvidia plans China research centre as export curbs bite: Report
5. hongkongfp - Nvidia plans China research centre as US export curbs bite: report

Moody's downgrades U.S. credit rating citing rising debt

(Source: Reuters)

Moody's downgraded the U.S. sovereign credit rating by one notch to "Aa1" from "AAA," citing concerns about the nation's growing US$36T debt pile.

The rating agency had been the last among major rating agencies to downgrade the country, though it had lowered its outlook in late 2023 due to wider fiscal deficits and higher interest payments.

The move comes as Republicans who control the House of Representatives and the Senate seek to approve a sweeping package of tax cuts, spending hikes and safety-net reductions, which could add trillions to the U.S. debt pile. Uncertainty over the final shape of the so-called "big beautiful bill" has investors on edge even as optimism has emerged over trade.

The bill failed to clear a key hurdle on Friday, even as U.S. President Donald Trump called for unity around the legislation.

A triple-A rating signifies a country's highest possible credit reliability, and indicates it is considered to be in very good financial health with a strong capacity to repay its debts.

Moody's said in a statement that it did not see a real effort by the government to cut spending, and that it expected the nation's fiscal performance to deteriorate compared with other highly developed economies.

Reference Sources

1. aawsat - Moody's Downgrade Intensifies Investor Worry about US Fiscal Path
2. newyorkpost - Moody's downgrades America's Triple-A credit rating — and here's why
3. bbc - Moody's downgrades US credit rating citing rising debt
4. independent - Moody’s downgrades US credit rating from top level for first time amid fears over soaring debt
5. rappler - Moody’s cuts America’s pristine credit rating, citing rising debt

UK overtakes China as second-largest U.S. Treasury holder

(Source: Getty Images)

Foreign holdings of U.S. treasuries soared to a record high in March, according to data from the Treasury Department, rising for a third straight month, as demand for U.S. government debt remained robust a few months after U.S. President Donald Trump took office.

Holdings of U.S. treasuries surged to US$9.05T in March, an all-time peak and up more than $233B from $8.81T in February. Compared with a year earlier, treasuries owned by foreigners rose nearly 12%.

Some analysts said that trends could change in April as the Trump administration introduced a massive trade shock on 2 April that saw effective tariff rates surge, particularly on Chinese goods. That fueled a U.S. treasuries sell-off that, at one point, pushed benchmark 10-year yields more than 70 basis points higher to nearly 4.6% over the April 3-11 period.

The selloff may have included selling from foreign investors, analysts said. Data also showed that UK investors have overtaken China as the second largest non-U.S. holder of treasuries, with holdings of $779B.

The crossover makes the UK the second-largest foreign holder of U.S. treasuries after Japan.

Reference Sources

1. cnbc - Foreign holdings of U.S. Treasuries top $9 trillion in March, data shows
2. ft - UK overtakes China as second-largest US Treasury holder
3. bussinesstimes - Foreign holdings of US Treasuries top US$9 trillion in March, data shows - The Business Times

The CommonWealth English daily news digest is a service curated by the CommonWealth English team with the help of AI tools.

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