Nvidia Expects $5.5 Billion Hit As US Tightens Export Controls

Shares in Nvidia have fallen, after the AI semiconductor giant revealed the financial impact of new US export controls to China.

Nvidia said on Tuesday in a SEC filing that it would take $5.5 billion in charges after the US government limited exports of its H20 artificial intelligence chip to China – news which pushed Nvidia’s share price down over 5 percent.

Nvidia confirmed that its H20 AI chip, which was designed specifically for the Chinese market to comply with previous US export controls, will now require a special licence to sell in China for the “indefinite future”.

Export controls

The US under the Biden Administration had already targeted China with two rounds of sanctions in October 2022 and October 2023 that specifically limited the parameters of AI chips that US firms such as Nvidia could sell to Chinese buyers.

For example in October 2022 the US announced its sweeping export controls for semiconductor manufacturing equipment and chips to China, including banning the export of the Nvidia A100 and more powerful H100 chips to mainland China and Hong Kong.

Then in October 2023 the US also banned the export of the slower Nvidia A800 and H800, which had been specifically developed for sale to China.

The United States export restrictions of certain AI chips to China over national security concerns, went into force in April 2024.

Then in December 2024 the outgoing Biden Administration announced another round of export controls designed to thwart Beijing’s semiconductor ambitions.

Tariff chaos

Amid the tariff chaos unleashed by US President Donald Trump last week, the US raised duties on Chinese products to 145 percent and has tightened export rules.

China in response raised tariffs on US goods to 125 percent, and state media outlet China Daily said the US President “should stop whining about itself being a victim in global trade”.

Since 2023 there have been reports that Huawei, Tencent and other Chinese start-ups were increasingly seeking Nvidia alternatives.

Nvidia hit

And now Nvidia has outlined the financial impact of the latest US export controls.

“On April 9, 2025, the US government, or USG, informed Nvidia Corporation…that the USG requires a license for export to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent therein, of the Company’s H20 integrated circuits and any other circuits achieving the H20’s memory bandwidth, interconnect bandwidth, or combination thereof. The USG indicated that the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China. On April 14, 2025, the USG informed the Company that the license requirement will be in effect for the indefinite future.

Nvidia noted that its fiscal first quarter 2026 ends on 27 April 2025.

“First quarter results are expected to include up to approximately $5.5 billion (£4.1bn) of charges associated with H20 products for inventory, purchase commitments, and related reserves,” it stated.

The US government told Nvidia the new rules were designed to address the national security risk that its products might be “used in, or diverted to, a supercomputer in China”.