Nvidia to Take $5.5 Billion Hit Due to New Export Restrictions on AI Chips to China
American semiconductor giant Nvidia announced on Tuesday, April 15, that new export restrictions on chips to China will result in a one-time charge of $5.5 billion in the first quarter of its fiscal year.
According to a document filed with the US Securities and Exchange Commission (SEC), the California-based company was informed last week that it must now obtain a license to export certain artificial intelligence (AI) chips to China and other countries. Following this announcement, Nvidia's stock price plummeted by over 5% during after-hours trading on the New York Stock Exchange.
The United States has been gradually implementing export restrictions on advanced processors to China, particularly those used in cutting-edge AI technologies and supercomputers. The stated goal is to preserve a technological advantage in this sensitive field.
The measure specifically affects Nvidia's H20 chips, which were specially designed to meet the requirements of previous restrictions while remaining accessible to the Chinese market. These components have inferior performance compared to the H100 and H200 models, which are widely used in the United States.
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