Nvidia has announced it expects a $5.5 billion financial impact after new US government export restrictions barred it from selling its advanced H20 AI chips to China without a license.
US-based microchip giant Nvidia warned on Tuesday that tightened export regulations will cost the company $5.5 billion as it halts sales of its H20 artificial intelligence chips to China and Hong Kong. The company confirmed that the US government informed it last week that new rules would require an export licence for the H20, one of its most sought-after chips in the Chinese market.
The move comes amid rising trade tensions between the US and China, as both nations impose steep tariffs and tighten restrictions across strategic industries, particularly in semiconductors and AI.
Following the announcement, Nvidia’s shares plunged nearly 6% in after-hours trading. The company said the license requirement is indefinite and is aimed at addressing national security risks, particularly the potential use of the chips in Chinese supercomputers.
“This is certainly a lot of money, but it’s something Nvidia can bear,” said Marc Einstein of Counterpoint Research, adding that the situation may still shift. “I wouldn't be surprised to see some exemptions or changes made to tariff policy in the near future.”
Founded in 1993, Nvidia initially gained prominence for producing graphics chips for gaming. In recent years, it has emerged as a leading force in AI, with its chips powering machine learning models and data centers globally. The H20 chip is a centerpiece of Nvidia's strategy in the AI boom, particularly in Asia.
The $5.5 billion charge includes costs related to existing inventories, purchase commitments, and reserves for the restricted products. Nvidia did not comment further when approached by the BBC.
Rui Ma, founder of the Tech Buzz China podcast, said that continued restrictions could lead to a full decoupling of US and Chinese AI chip supply chains. “It doesn’t make any sense for any Chinese customer to be dependent on US chips,” she said, noting that China is already facing an oversupply of data centers.
The Biden administration’s move to curb technology exports is part of a broader push—also endorsed by President Donald Trump—to maintain US dominance in advanced tech sectors amid China’s growing capabilities.
U.S. forces struck two Iranian rocket launchers on Larak Island on Sunday, with Tehran responding by launching ballistic missiles at two U.S. bases...
The death toll from last week's catastrophic floods in Nepal and Tibet rose to 939 on Monday, with 3,044 peo...
At least 11 people, including eight children, have been killed after a powerful explosion at a firecracker fact...
Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan have concluded talks in Bishkek, the capital of Kyrgyzstan, as leaders gather for the Shanghai Cooperation Organisation (SCO) summit.
Iran has reached an understanding with Oman on transit arrangements through the Strait of Hormuz, but the waterway will remain closed until the U.S. fulfils its commitments, a senior Iranian diplomat said on Saturday.
Iranian Foreign Minister Abbas Araghchi accused U.S. government and Israel-aligned actors of manipulating energy markets to promote the war with Iran.
Russian strikes on the Kyiv region overnight killed 37 people, Ukrainian President Volodymyr Zelenskyy has said. Zelenskyy added that the Ukrainian capital was under "virtually nonstop attack" from drones.
U.S. forces struck two Iranian rocket launchers on Larak Island on Sunday, with Tehran responding by launching ballistic missiles at two U.S. bases in Jordan in the first direct U.S.-Iran military escalation in weeks.
The death toll from last week's catastrophic floods in Nepal and Tibet rose to 939 on Monday, with 3,044 people still missing, as fresh rainfall pushed up river levels and forced rescuers to move to higher ground.
Recovery teams are continuing operations in Grand Canyon National Park after flash floods swept through parts of the canyon over the weekend, leaving one person dead and leading to the discovery of a second body that has yet to be recovered.
Türkiye, Pakistan and Saudi Arabia have formalised their new defensive alliance at the grouping’s first high-level meeting held Monday in Istanbul.
Iran’s President Masoud Pezeshkian has stated that Tehran is not pursuing a military conflict but promised a strong response to 'aggressors' while the Army and Revolutionary Guards said they carried out retaliatory attacks against U.S. bases in the region on Monday.
Kyrgyzstan is hosting the sixth World Nomad Games, bringing together thousands of athletes from around the world for a celebration of traditional sports, cultural heritage and nomadic traditions.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment