Nvidia Hit With USD 5.5 Billion Charge as US Blocks AI Chip Sales to China
Nvidia will take a charge of USD 5.5 billion after the United States government restricted exports of its H20 artificial intelligence chip to China, a major market for the company.
The H20 is Nvidia’s most advanced AI chip available in China and had been central to its strategy to remain active in the country’s growing AI sector.
The U.S. Commerce Department announced new licensing requirements for exports of chips including Nvidia’s H20 and AMD’s MI308, citing national and economic security concerns.
Nvidia said the charges are tied to inventory, purchase commitments and related reserves for the H20 chip.
The company was informed on April 9 that the H20 would require a licence for export to China, and on April 14, it was told the restrictions would remain in place indefinitely.
Nvidia shares fell about 6% in after-hours trading following the announcement. AMD shares dropped 7%.
Chinese tech giants including Tencent, Alibaba and ByteDance had been increasing orders for the H20 chip, driven by demand from AI startup DeepSeek.
Although the H20 is not as powerful as Nvidia’s chips sold outside China for training AI models, it performs competitively in inference tasks, which are becoming the largest segment of the AI chip market.
The U.S. government cited concerns that the H20’s high-speed memory and chip connectivity could enable its use in supercomputers, which have been under export restrictions since 2022.
The Institute for Progress, a Washington, D.C.-based think tank, supported the restrictions, stating that companies like Tencent and DeepSeek may already be using H20 chips in breach of existing controls.
The announcement comes a day after Nvidia revealed plans to build AI servers worth up to USD 500 billion in the U.S. over the next four years, in partnership with companies such as TSMC.
Nvidia faces USD 5.5 billion charge due to U.S. export restrictions
H20 AI chip sales to China now require a licence indefinitely
U.S. cites national security risks tied to supercomputer use
Source: REUTERS
