The AI industry is in a state of confusion and uncertainty following the introduction of tariffs by the Trump administration, which may have a devastating impact on the supply of graphics processing units (GPUs). The tariffs, which are set to take effect on April 9th, have sparked concerns over the availability and cost of GPUs, a crucial component in AI computing and other industries.

The uncertainty surrounding the tariffs has already taken a toll on the tech industry, with Nvidia's stock price plummeting 7.59% and TSMC's dropping 7.22%. The so-called "Magnificent Seven" tech companies, including Amazon, Google, and Microsoft, have lost over $1 trillion in market capitalization since the tariffs were announced. The impact of the tariffs extends beyond the AI industry, as GPUs are also used in datacenters, cloud architectures, and other applications.

At the heart of the uncertainty is the question of whether GPUs will be exempt from the tariffs. While the Trump administration has spelled out an exception for semiconductor chips, it remains unclear whether complete electronic products that contain these chips will be subject to tariffs. Chris Miller, a professor at Tufts University and author of "Chip War: The Fight for the World's Most Critical Technology," believes that most AI GPUs are imported as servers from Taiwan and will therefore face the general Taiwan tariff rate of 32%.

The lack of clarity from the Trump administration has added to the uncertainty, with government agencies directing questions to the White House, which has not provided a clear answer. Tech lobbyists in Washington are worried about the president's mercurial nature and vindictive attitude towards the tech industry, which may influence the tariffs. "Everyone's asking for clarity from the administration," said one lobbyist. "So far, folks are saying that they think we're okay, but not sure yet."

The AI industry has reason to believe that Trump may favor it, given his previous support for companies like Apple. However, the current uncertainty and unpredictability of the tariffs have shaken confidence in the industry. OpenAI's Sam Altman and other tech CEOs recently stood alongside Trump at the White House to announce a $500 billion datacenter infrastructure project, but the unclear state of GPUs may require them to renew their efforts to curry favor with the president.

Nvidia, a major player in the GPU market, has begun moving manufacturing to the US, which may help insulate it from the tariffs. However, other companies, including compute-hungry AI labs, hyperscale cloud providers, and PC builders, may not be so lucky and could end up paying substantially more for GPUs. "If the tariffs are unchanged, we should prepare for a significant increase in the price of electronics," said Miller.

The situation is further complicated by the fact that the US imports 90% of its rare earth minerals from China, which has announced new export restrictions on these crucial materials. The tariffs could also have indirect consequences, such as pushing the US into a recession that devastates the tech economy. A group of tech CEOs and finance leaders are reportedly heading to Trump's private resort, Mar-a-Lago, to discuss the tariffs and seek exemptions.

In conclusion, the uncertainty surrounding Trump's tariffs has sent the AI industry into a tailspin, with far-reaching implications for the tech industry as a whole. As the situation continues to unfold, one thing is clear: the impact of these tariffs will be felt for a long time to come.