China has begun implementing guidelines that will keep Intel and Advanced Micro Devices processors out of government PCs and servers, part of a growing technological decoupling with the U.S. The news rocked Intel stock and AMD stock on Monday.
The Financial Times reported the new guidelines on Sunday. The changes also will limit the use of Microsoft's Windows operating systems as well as foreign database software. The latest mandates come as many Chinese government entities and state-owned enterprises have barred the use of Apple iPhones at work.
China's actions are an effort to buoy domestic technology in the face of U.S.-led restrictions on exports to China. The U.S. has barred Nvidia and AMD from selling artificial intelligence chips to China, as well as advanced chipmaking equipment. The U.S. also has barred Huawei telecom gear and other technology, pushing other countries to do the same.
The move to curb Intel and AMD chips and Microsoft Windows software stems from guidelines released late last year requiring most government entities to purchase "safe and reliable" processors and operating systems.
Intel Stock Drops, AMD Stock Wavers
On the stock market today, Intel stock sank 1.7% to close at 41.83. Earlier in the session, it had dropped as much as 4.7% to 40.57.
AMD stock tumbled as much as 4.3% to 172 in morning trades before regaining ground. AMD stock ended the session down 0.6% to 178.63.
AMD shares have been on a downtrend since March 8 when it retreated from a record high of 227.30. Shares fell further amid strong positive reaction to Nvidia's next-generation AI chip.
Intel has much greater exposure to China than AMD, Bernstein analyst Stacy Rasgon said in a client note. In 2023, Intel got about 27% of its sales, totaling about $15 billion, from China. Meanwhile, AMD got about 15% of sales, or about $3.4 billion, from China last year. However, those figures include sales to consumer, business and government markets, Rasgon said.
Elsewhere on Wall Street, Microsoft stock fell 1.4% to close at 422.86 on Monday. Microsoft shares rose 3% to 428.74 last week, hitting a record high amid general AI optimism and Microsoft's own AI event.
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