Nvidia on Tuesday notified regulators that it expects a $5.5 billion hit this quarter due to a new US licensing requirement on the primary chip it can legally sell in China.
US officials last week told Nvidia it must obtain licenses to export its H20 chips to China because of concerns they may be used in supercomputers there, the Silicon Valley company said in a Securities and Exchange Commission (SEC) filing.
Shares of Nvidia, which have seen high volatility since US President Donald Trump made a major tariffs announcement on April 2, were down more than six percent in after-market trades.
The new licensing rule applies to Nvidia GPUs (graphics processing units) with bandwidth similar to that of the H20.
The United States had already restricted exports to China of Nvidia’s most sophisticated GPUs, tailored for powering top-end artificial intelligence models.
Nvidia was told the licensing requirement on H20 chips would last indefinitely, it said in the filing.
Nvidia’s current fiscal quarter ends on April 27.
“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 CEO Jensen Huang has said publicly that the AI chip powerhouse will balance legal compliance and technological advances under Trump, and that nothing will stop the global advancement of artificial intelligence.
“We’ll continue to do that and we’ll be able to do that just fine,” the Taiwan-born entrepreneur told reporters late last year.
Trump’s predecessor Joe Biden restricted Nvidia from selling some of its top AI chips to China, which the United States sees as a strategic competitor in technology.
Global markets have been on a roller coaster since Trump’s April 2 announcement, declining sharply before partially recovering with his 90-day pause on the steepest tariff rates last week.
Trump warned Sunday that no country would be getting “off the hook” on tariffs despite a 90-day reprieve on some levies, while also downplaying exemptions for Chinese technology.
Most nations will now face a baseline 10 percent tariff for the near-three-month period — except China, which launched a tit-for-tat escalation.
China has sought to present itself as a stable alternative to an erratic Washington, courting countries spooked by the global economic storm.
