Tuesday Nvidia said that the United States government had blocked the sale of some of its artificial intelligence chips in China without a license and would have started requesting a license for future sales.
Restrictions are the first main limits that the administration of President Trump has broadcast with the sales of semiconductors abroad. It increases the possibility that Nvidia sales in China will evaporate in the coming months, putting an end to a company that has contracted when the United States have curbed the exports of chips to its geopolitical rival.
Nvidia fought hard to maintain sales in China in the face of the growing restrictions of the United States government. In 2022, the Biden administration imposed the rules for curbing the export of the best chips to Nvidia in China. Nvidia replied by changing one of its main AI chips, the H100, so that its skills decreased below the threshold of the United States government. The resulting H20 chip has become a specific China product.
Nvidia will take a charge of $ 5.5 billion compared to its revenues in the current quarter due to the H20 inventory, the purchase commitments and the related reserves, which will not be able to sell or fulfill following the new government rule, said the company.
Writing is a strategic blow greater than a financial one. Nvidia, which dominates the market for the semiconductors used in the construction of artificial intelligence systems, has considered the sale of chip to vital China for its future. If he retired from the market, he feared that he would give in sales to China’s main chipmaker, Huawei, and that Huawei would start challenging him for sales all over the world.
“This kills Nvidia’s access to a key market and will lose traction in the country,” said Patrick Moorhead, technological analyst with Moor Insights & Strategy. “Chinese companies go to Huawei.”
Nvidia refused to comment. The price of the company’s shares dropped by more than 5 percent in negotiations after Tuesday hours.
A spokesman for the Department of Commerce, Benno Kass, declared Tuesday that the administration was issuing new export license requirements for the NVIDIA H20; a chip of advanced micro devices, the Mi308; and their equivalent.
“The Department of Commerce is committed to acting on the President of the President to safeguard our national and economic security,” said Kass.
Nvidia revealed the change in the regulatory deposit Tuesday, one day after the company won the praise of the White House for promising to invest $ 500 billion in artificial intelligence infrastructures in the United States. The company had declared that she would start creating servers in a factory in Houston and working with chip packaging companies based in Arizona.
But those promises were made after the Trump administration had informed Nvidia in private on Wednesday that he would start requesting a license to sell any to Chips from China, Nvidia said in his regulatory deposit. The company declared Tuesday that the Trump administration had followed that notice to say that the license requirements “will be in force for the indefinite future”.
The change comes even weeks after Jensen Huang, CEO of Nvidia, met Mr. Trump during a navy dinner that costs $ 1 million to a person. In the wake of that meeting, there was news that the United States government would have withdrawn his plan to limit Nvidia sales to China.
Since Trump came in office, his administration has promised to repress the support of the United States to Chinese artificial intelligence companies. The Chinese start-up Deepseek has shocked Washington in recent months, when it has released a new artificial intelligence system that according to him had been created for a small part of the cost that the US companies had spent to train artificial intelligence.
During his appointment hearing, the secretary of the Howard Mr. Lutnick trade said that the United States should stop letting Chinese companies use American technology, including Nvidia, “compete with us”.
Last year, Nvidia recorded sales of $ 17 billion in China. The company’s activity contracted as a total percentage of its revenue in the face of the restrictions of the United States government. Sales in China, which were about a fifth of Nvidia’s revenue in the tax year of 2023, decreased to 13 % last year.
In his deposit, Nvidia did not say whether the license requirements would have influenced future sales. Since he creates the H20 chip by limiting the performance of his H100 chips, he only has a limited inventory, analysts say. It can sell the H100 chips that have not been manipulated with US and European companies.