The tariffs introduced by Donald Trump on April 2NVIDIAhad a significant impact. The company sources almost all of its GPU products from TSMC and is likely to face price increases in the near future. However, data center servers used for AI workloads can partially avoid the new tariffs, according to market analysts.

The tech industry is still grappling with the consequences of the U.S. government’s new economic policies on its traditional partners and competitors. Meanwhile, analysts are trying to determine whether some of the most popular tech stocks will prove resilient in the face of the resulting financial shock.

Stacy Rasgon, a senior analyst at Bernstein Research, said that in fact, most of NVIDIA's artificial intelligence data center servers may be able to avoid Trump's recent tariffs.

The potential impact of tariffs on NVIDIA's artificial intelligence data center products has been one of the most frequently asked questions since Trump's announcement. The analyst explained that semiconductor products have so far been exempt from reciprocal tariffs. However, NVIDIA primarily sells "core hardware," which may fall under the new tariff measures.

One possible loophole may lie in the United States-Mexico-Canada Agreement (USMCA), the free trade agreement signed by Donald Trump and entered into force on March 13, 2020. Products produced in Mexico and complying with USMCA requirements remain exempt from the latest tariffs. Rascon noted that NVIDIA built its AI data center systems in Mexico, which may help protect it from tariff-related price increases.

With NVIDIA's own export compliance data, it's possible to track where the parts it manufactures come from. According to Rasgon, the majority of NVIDIA's server shipments, including DGX and HGX systems, come from Mexico, with about 60% manufactured locally and the other 30% produced in Taiwan. Given the AI ​​industry's heavy reliance on NVIDIA hardware, it's safe to say that the vast majority of AI servers are currently shipped through Mexico.

USMCA states that these product categories comply with the agreement and should therefore be exempt from the latest tariffs imposed by US authorities. NVIDIA and its manufacturing partners are ramping up production in Mexico, which means the proportion of products exempt from tariffs is expected to increase over time.

At the company's annual GTC conference, NVIDIA CEO Jensen Huang said the impact of tariffs would not be "significant" in the short term. Huang is likely referring to expanding operations in Mexico, where Foxconn is expanding production to better meet NVIDIA's growing hardware demand.