Olivia Asher is a reporter at the New Herald Tribune covering breaking news for the Digital Trends Desk. Before joining the newsroom in 2022, she covered criminal justice issues at the Orlando Plain Dealer.
January 30 , 2025
Washington, DC - President Donald Trump has attributed the recent plunge in Nvidia's stock price to what he calls "misguided diversity initiatives." The tech giant's shares tumbled following reports of potential new U.S. restrictions on chip sales to China and the emergence of a cost-effective AI model from Chinese startup DeepSeek.
Trump, who has been waging a war against diversity, equity, and inclusion (DEI) programs since taking office, claimed that Nvidia's focus on DEI had distracted the company from innovation and competitiveness. "When you prioritize diversity over merit, this is what happens. Nvidia should have been focusing on making the best chips, not filling quotas," Trump stated in a press conference.
The President's comments come amid his administration's broader crackdown on DEI initiatives. Trump has already issued executive orders to eliminate DEI programs in federal agencies and is now setting his sights on the private sector. His recent actions have left many corporations uneasy, with some, like Target, rolling back their DEI commitments in response to the new political climate.
However, industry experts argue that Trump's claims are unfounded. They point out that Nvidia's stock drop is more likely due to geopolitical tensions and increased competition in the AI chip market. The company's H20 chip, developed to comply with existing U.S. export rules, is now at risk of facing new restrictions.
Meanwhile, the emergence of DeepSeek's AI model, which reportedly uses cheaper chips and fewer data resources, has raised concerns about potential challenges to Nvidia's dominance in the AI chip market. This development, coupled with the ongoing U.S.-China tech tensions, appears to be the primary driver of investor uncertainty.
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