US Imposes Export License on Nvidia H20 Chips to China, Triggers $5.5 Billion Charge

NVIDIA has announced that the U.S. government will require a license for the export of its H20 AI chips to China, Hong Kong, and Macau, citing concerns that these chips could be used in supercomputers in China. This new export control, which will be in effect indefinitely, follows calls from government officials for stronger restrictions. As a result, NVIDIA anticipates a charge of $5.5 billion related to inventory and purchase commitments in its upcoming fiscal quarter. The H20 chips are currently the most advanced AI chips that can be exported under existing regulations, and this change represents a significant escalation in U.S.-China trade tensions. Following the announcement, NVIDIA's stock dropped as much as 7% in after-hours trading. The company had previously sought to retain its Chinese customers and had made commitments to invest in U.S. AI data centers, raising questions about the future of its operations in the region.