Nvidia projects $5.5 billion hit as US restricts exports of H20 AI chips to China; stock falls over 6% in extended trade
Nvidia on Tuesday announced it expects a hit of $5.5 billion in its current fiscal quarter, following new US government restrictions on exports of its H20 artificial intelligence (AI) chips to China. Nvidia share price plunged 6.33% during after-hours trading.
In a filing with the US Securities and Exchange Commission (SEC), Nvidia said US officials had recently informed the company that it must obtain export licenses to sell its H20 chips to China because of concerns they may be used in supercomputers there.
The new licensing rule applies to Nvidia GPUs (graphics processing units) with bandwidth similar to that of the H20.
“First quarter results are expected to include up to approximately $5.5 billion of charges associated with H20 products for inventory, purchase commitments, and related reserves,” Nvidia said in the filing. Nvidia’s current fiscal quarter ends on April 27.
The Silicon Valley company was told the licensing requirement on H20 chips would last indefinitely, it said in the filing.
Nvidia’s AI chips have been a key focus of US export controls as US officials have moved to keep the most advanced chips from being sold to China as the US tries to keep ahead in the AI race, Reuters reported. After those controls were implemented, Nvidia began designing chips that would come as close as possible to US limits.
The H20 is currently Nvidia’s most advanced chip for sale in China and is central to its efforts to stay engaged with China’s booming AI industry. Chinese companies including Tencent, Alibaba and TikTok parent ByteDance had been ramping up orders for H20 chips due to booming demand for low-cost AI models from startup DeepSeek, Reuters reported in February.
Nvidia’s $500 billion AI investment
The news comes as Nvidia said on Monday it was planning to build AI servers worth as much as $500 billion in the US over the next four years with help from partners such as TSMC.
The company said it was also building supercomputer manufacturing plants in Texas with Foxconn and Wistron Corp., and partnering with Amkor Technology Inc. and Siliconware Precision Industries Co. for packaging and testing operations in Arizona.
“Mass production” is expected to ramp up in the next 12 to 15 months, it said.
(With inputs from Reuters)
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