Nvidia's $5.5 Billion Loss, Huawei Capitalizes, OpenAI's New Models & Windsurf Acquisition
New US export laws cost Nvidia $5.5 billion, Huawei plans on filling their void, OpenAI announced new reasoning models, and could compete with Cursor.
Nvidia Faces $5.5B Hit from U.S. AI Chip Export Rules
Nvidia announced a $5.5 billion loss on April 15, 2025, due to canceled orders for its H20 chip, now requiring a U.S. export license for China. The tightened rules aim to curb China’s AI progress, impacting Nvidia and competitors like AMD.
Such a large write-off means there’s a void in AI chips, which could fuel demand for alternatives like Huawei’s 910C. If competitors like Huawei get enough share, it could weaken Nvidia’s CUDA moat, while letting Huawei go up the stack and design more sophisticated chips.
Huawei Prepares Mass Shipments of 910C AI Chip
Speaking of Huawei, they announced plans to launch mass shipments of their 910C AI chip, positioning it as a substitute to Nvidia’s H20 for Chinese markets.
Manufactured by SMIC using 7nm technology, the chip prioritizes architectural improvements over raw technological leaps, though low yield rates may limit initial supply.
The question is whether Huawei can get enough share to weaken Nvidia’s CUDA moat. If it can, Nvidia could have a global competitor in the future with Huawei.
OpenAI Releases o3 and o4-mini Reasoning Models
OpenAI released o3 and o4-mini models, designed for enhanced reasoning tasks like code generation and complex problem-solving. The o3 model leverages chain-of-thought reasoning, where AI breaks down problems step-by-step.
Here is o3 in action, showing how they don’t just see images, they think with them. This creates a new class of problem-solving that blends visual and textual reasoning.
Agentic Capabilities: Trained to reason strategically, these models decide when and how to use tools to deliver detailed answers in under a minute.
For instance, when asked, “How will summer energy usage in California compare to last year?” the model can search public utility data, write Python code for forecasting, generate a graph, and explain key factors, chaining multiple tool calls. If initial searches fall short, the models adapt by refining queries with search providers, ensuring flexibility.
This approach enables tackling complex tasks requiring real-time data, synthesis, and multi-modal outputs, empowering developers and businesses with dynamic, problem-solving AI.
OpenAI Eyes $3B Acquisition of Windsurf Coding Tool
OpenAI is in talks to acquire Windsurf, an AI-assisted coding platform, for $3 billion. Windsurf integrates AI models like Anthropic’s Claude to streamline programming tasks.
The deal would bolster OpenAI’s developer tools, competing with Cursor, which hit $100 million ARR in just 12 months, and has $200 million ARR as of March. The acquisition reflects AI’s deepening role in software development, but the ultimate question is whether they can compete in both enterprise and consumer.
Most of the dominant tech companies focused on just enterprise or consumer initially, and some like Amazon jumped the fence much later in their lifetime with AWS.
Kling 2.0 Launched New Text-to-Video AI
Kling 2.0, launched this week, delivering movie-quality AI-generated videos from text prompts.
Developed by a Chinese AI firm, it targets creators and marketers needing cost-effective video production. Their ability to handle complex scenes could disrupt stock footage industries, but the compute costs are still high.
Prompt: The dinosaur charges towards the camera, with motion blur and the camera shaking.
Intel to Require Licenses for AI Chip Exports to China
Intel informed Chinese clients on April 16, 2025, that it will need licenses to export certain AI processors, aligning with U.S. restrictions to slow China’s AI advancements.
For Chinese firms, this could disrupt AI development timelines, pushing reliance on domestic chips like Huawei, as mentioned earlier.
Globally, businesses may face supply chain delays and higher costs. The policy highlights the tension of balancing national security with open innovation, with no clear resolution in sight.
