Tue Apr 15 22:00:00 UTC 2025: ## Nvidia Faces $5.5 Billion Hit from US Chip Export Restrictions to China
**Santa Clara, CA – May 16, 2024** – Nvidia, the leading graphics processing unit (GPU) maker, announced a significant financial blow stemming from tightened US export controls on its H20 AI chips destined for China and other countries. The company revealed a $5.5 billion charge related to the restrictions, sending its stock price down 6% in after-hours trading.
The US government mandated in April that Nvidia require a license to export the H20 chips, which, while designed to comply with previous export restrictions, are still considered capable of being used in military supercomputers. This marks a substantial escalation of restrictions targeting advanced AI chip sales to China, impacting a previously lucrative market estimated to generate $12 billion to $15 billion for Nvidia in 2024. The restrictions are indefinite, according to Nvidia’s recent SEC filing.
CEO Jensen Huang previously acknowledged a 50% revenue drop from China due to earlier export controls, and the company now faces further challenges from new AI diffusion rules starting next month. Nvidia has argued that these restrictions could stifle competition and hinder US technological competitiveness, particularly given that roughly half of the world’s AI researchers are based in China, many working for US AI labs.
The H20 chip, while comparable to Nvidia’s higher-performing H100 and H200 chips, uses older technology and slower interconnection speeds. Its use by Chinese AI company DeepSeek in their competitive R1 AI model further highlights the impact of the restrictions.
Nvidia is now focused on selling its latest generation of AI chips, called Blackwell, and has previously relocated some operations out of China in response to export controls. The company’s first-quarter fiscal results, due May 28th, will provide further insight into the full impact of these restrictions.
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