News from the AI & ML world
DeeperML
ashilov@gmail.com (Anton@tomshardware.com
//
Nvidia is facing a significant financial setback due to tightened U.S. export restrictions on its H20 AI chips to China. The U.S. government, citing concerns about the chips' potential use in Chinese supercomputers, now requires Nvidia to obtain special licenses for all H20 chip exports to China, Hong Kong, and Macau. This indefinite restriction, revealed on April 9, 2025, has forced Nvidia to write off $5.5 billion in GPUs, as unsold inventory and sales commitments take a hit. The H20 chip, a modified version of the H100 designed to comply with previous export rules, was a key product for Nvidia in the Chinese market, powering AI applications like chatbots and image generators.
This move by the U.S. government is seen as a further escalation in the ongoing tech rivalry between the two nations. The restrictions aim to prevent the H20 chips, known for their memory and interconnect bandwidth, from contributing to China's AI ambitions, particularly in supercomputing. While Nvidia can still apply for licenses, the expectation is that denials will be the norm, effectively cutting off a significant revenue stream. This stricter stance represents a shift from previous policies, which permitted the export of the H20 as a less powerful alternative to other restricted chips. Even AMD's Instinct MI308 is reportedly facing export restrictions too.
The financial impact of these restrictions is substantial. Nvidia anticipates a $5.5 billion charge in its first fiscal quarter of 2026, which ends on April 27, 2025, due to inventory, purchase commitments, and related reserves. This news sent Nvidia shares tumbling in after-hours trading, raising concerns about the company's future prospects in the crucial Chinese market. The regulatory filing indicated that the new controls are in place to prevent the chips from finding their way into Chinese supercomputers.
ImgSrc: cdn.mos.cms.fut
References :
This move by the U.S. government is seen as a further escalation in the ongoing tech rivalry between the two nations. The restrictions aim to prevent the H20 chips, known for their memory and interconnect bandwidth, from contributing to China's AI ambitions, particularly in supercomputing. While Nvidia can still apply for licenses, the expectation is that denials will be the norm, effectively cutting off a significant revenue stream. This stricter stance represents a shift from previous policies, which permitted the export of the H20 as a less powerful alternative to other restricted chips. Even AMD's Instinct MI308 is reportedly facing export restrictions too.
The financial impact of these restrictions is substantial. Nvidia anticipates a $5.5 billion charge in its first fiscal quarter of 2026, which ends on April 27, 2025, due to inventory, purchase commitments, and related reserves. This news sent Nvidia shares tumbling in after-hours trading, raising concerns about the company's future prospects in the crucial Chinese market. The regulatory filing indicated that the new controls are in place to prevent the chips from finding their way into Chinese supercomputers.
ImgSrc: cdn.mos.cms.fut
Share:
References :
- www.tomshardware.com: Nvidia writes off $5.5 billion in GPUs as US gov't chokes off supply of H20s to China
- The Register - Software: Trump derails Chinese H20 GPU sales, forcing Nvidia to eat $5.5B this quarter
- TechDator: U.S. Tightens Grip on Nvidia’s H20 Chips to China, Slapping $5.5 Billion Hit
- www.theguardian.com: Nvidia expects to take $5.5bn hit as US tightens AI chip export rules to China
- techdator.net: U.S. Tightens Grip on Nvidia’s H20 Chips to China, Slapping $5.5 Billion Hit
- Siladitya Ray: Nvidia Falls In Premarket After Projecting $5.5 Billion Blow From New Restrictions On AI Chip Exports To China
- www.computerworld.com: Nvidia expects ban on chip exports to China to cost $5.5B
- www.techrepublic.com: US Blocks NVIDIA Chip Sales to China – Company Projects $5.5B Hit
- www.lemonde.fr: Nvidia warns of $5.5 billion hit from new US chip export curbs
- THE DECODER: Nvidia has announced plans to manufacture AI supercomputers entirely within the United States for the first time.
- www.tomshardware.com: Made in the USA: Inside Nvidia's $500 billion server gambit
- www.itnews.com.au: Nvidia faces US$5.5 billion charge from restricted chip sales to China
- www.it-daily.net: With stricter restrictions on the supply of AI chips to China, the US government is causing semiconductor giant Nvidia to lose billions of dollars. Nvidia announced that the company will record a charge of 5.5 billion dollars in connection with inventories and purchase commitments.
- Tech Monitor: Nvidia has unveiled plans to invest up to $500bn in AI server construction in the US over the next four years.
- bsky.app: On the same day we reported Trump admin was easing off Nvidia H20 chip restrictions following Jensen Huang’s dinner with Trump and promise to invest in AI data centers, WH reversed and informed Nvidia it would be restricting H20s amid pressure from bipartisan China hawks
- www.tomshardware.com: Nvidia CEO reaffirmed the company's commitment to serving China despite escalating U.S. export restrictions.
- www.theguardian.com: Nvidia’s CEO makes surprise visit to Beijing after US restricts chip sales to China