Nvidia faces $5.5 billion in charges after the U.S. government limited exports of its H20 artificial intelligence chip to China, which happens to be a key market for one of its most popular chips. Nvidia’s AI chips have been a key focus of U.S. export controls in a move to keep these most advanced chips from being sold to China. This is to preserve the US lead in the AI race.
To meet these regulations, Nvidia developed processors designed to comply with US restrictions while maximising performance within those limits.
Chinese companies including Tencent, Alibaba and TikTok parent ByteDance had been ramping up orders for H20 chips.
US chip sales restriction to China
In a filing Nvidia disclosed that the US government notified the company would require a licence to export its H20 chips to China and several other countries. A US Commerce Department spokesperson announced late Tuesday that new licensing requirements would be implemented for exports of chips, including Nvidia’s H20, AMD’s MI308 and their equivalents.
"The Commerce Department is committed to acting on the President's directive to safeguard our national and economic security," said the spokesperson of the department that oversees US export controls.
The latest export restrictions represent a clear indication that Nvidia’s robust growth trajectory may be constrained by escalating geopolitical limitations. The United States has stated that these high‑performance CPUs could power military‑grade supercomputers.
Nvidia is set to announce its first‑quarter financial results on May 28.
Also Read: Nvidia to Invest Billions in U.S.-Made Chips, Confirms Blackwell Production
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