Nvidia has announced it expects to incur a charge of up to $5.5 billion in its first fiscal quarter, ending April 27, 2025, as a result of new U.S. export restrictions on its H20 artificial intelligence chips to China. The U.S. government has mandated that exports of the H20 chip now require a license, with these rules set to remain in place indefinitely.
The H20 chip, Nvidia’s most advanced AI chip available in China, had seen significant demand from major Chinese tech firms such as Tencent, Alibaba, and ByteDance. However, the U.S. government determined that the H20’s high-speed memory and compute connectivity could enable its use in Chinese supercomputers, leading to the export ban.
The $5.5 billion charge stems from inventory, purchase commitments, and related reserves for the H20. Following the announcement, Nvidia’s stock dropped over 6% in after-hours trading.
