Key Points
- Nvidia said on Tuesday that it will take a quarterly charge of about $5.5 billion tied to exporting H20 graphics processing units to China and other destinations.
- The stock slid almost 5% in extended trading.
- The U.S. government, during the Biden administration, restricted AI chip exports in 2022 and then updated the rules the following year to prevent the sale of more advanced AI processors.
Nvidia CEO Jensen Huang delivers the keynote address during the Nvidia GTC 2025 at SAP Center on March 18, 2025, in San Jose, California.
Justin Sullivan | Getty Images
Nvidia
said on Tuesday that it’ll take a quarterly rate of about $5.5 billion tied to exporting H20 photos processing gadgets to China and other locations. The inventory slid more than 6% in prolonged trading.
The agency said in a filing that on April 9, the U.S. Government advised Nvidia it would require a license to export the chips to China and a handful of other international locations.
The disclosure is the most powerful indication that multiple export regulations on Nvidia’s chips, which the USA government claims can be used to construct supercomputers for the army, can slow its historical growth. Nvidia reviews fiscal first-quarter results on May 28.
During President Biden’s management, the U.S. Restrained AI chip exports in 2022, after which it updated the guidelines the following year to prevent the sale of extra superior AI processors. The H20 is an AI chip for China that was designed to conform to U.S. Export restrictions. It generated an expected $12 billion to $15 billion in sales in 2024.
On the enterprise’s latest quarterly profits named in February, Nvidia CEO Jensen Huang stated that revenue from China had fallen to half of pre-export management levels. Nvidia protected Huawei as a rival for the second consecutive year in its annual filing, as Huang warned that competition is growing in China. According to Nvidia’s annual report, China is the fourth-biggest location with the aid of income, following Singapore, Taiwan, and the United States. More than 1/2 of its income went to U.S. Businesses in its economic 12 months leading up to January.
The H20 chip from Nvidia is comparable to the H100 and H200 AI chips, which might be utilized in the United States and other nations; however, it has slower bandwidth and interconnection speeds. It is based totally at the Hopper AI structure, which was introduced in 2022. Nvidia is now focusing on selling its current generation of AI chips, called Blackwell.
H20 chips were applied in the studies conducted via DeepSeek, a Chinese corporation whose aggressive AI version R1 defied expectations and was brought in advance this 12 months. In addition to the prevailing Chinese export controls, Nvidia additionally faces new restrictions on what it can export starting next month, underneath “AI diffusion regulations” first proposed by the Biden administration.
Nvidia has argued that similar controls on its chips would stifle competition and probably even erode U.S. Competitiveness in the generation. The organization formerly stated it moved some of its operations, together with testing and distribution, out of China after the 2022 export controls.
When asked approximately Chinese export controls at the organization’s annual convention last month, Huang said that Nvidia works to comply with the law. However, he additionally stated that about 1/2 of the world’s AI researchers are from China, and lots of them work at AI labs in the United States. Nvidia stated in Tuesday’s filing that the U.S. Authorities informed the agency on Monday that the license requirement for H20 chips might be in effect “for the indefinite future.”
This year, President Trump’s statement of big tariffs on foremost trading partners is basically to blame for the sixteen percent drop in Nvidia’s inventory fees. While exemptions have been made on numerous electronics products, together with smartphones, computer systems, and semiconductors, Trump and some officers stated over the weekend that the reprieve was temporary and part of plans to apply separate price lists to the arena.
Shares of modern-day microprocessors following Nvidia’s disclosure, Tuesday’s after-hours buying and selling saw a decrease of more than 7%. AI chipmaker Broadcom
fell almost 4%.