Nvidia announced on Tuesday it would take $5.5 billion in charges following new U.S. export restrictions on its H20 artificial intelligence chips to China, one of its key markets.
The move comes as the U.S. Commerce Department enforces licensing requirements on exports of advanced AI chips, including Nvidia’s H20 and AMD’s MI308, to safeguard national and economic security.
The H20 is Nvidia’s most advanced AI chip available for the Chinese market and central to the company’s plans to maintain a presence in China’s fast-growing AI sector. Major Chinese tech firms such as Tencent, Alibaba, and ByteDance have reportedly placed significant orders for the chip to meet rising demand for affordable AI models.
Although the H20 is not the fastest for training AI models, it is highly competitive in inference tasks — the part of the AI process where models respond to user input. This stage has become the most commercially significant segment of the AI chip market.
Nvidia CEO Jensen Huang has previously emphasized the company’s strong position to lead in this area.
However, U.S. authorities determined that the chip’s high-speed memory and connectivity features could be used in supercomputing applications, prompting its restriction. The U.S. has imposed similar supercomputing-related export rules since 2022.
The Commerce Department informed Nvidia on April 9 that the H20 would now require a license to export to China and confirmed on April 14 that the restrictions would remain indefinitely. It remains uncertain how many licenses, if any, will be approved under the new rules.
As a result of the restrictions, Nvidia shares fell about 6% in after-hours trading. AMD shares also dropped around 7%. Nvidia said the $5.5 billion in charges are linked to inventory, purchase commitments, and other reserves related to the H20 chip.
The announcement follows Nvidia’s earlier disclosure that it plans to invest up to $500 billion over the next four years to build AI servers in the U.S., working alongside partners such as TSMC, aligning with the Trump administration’s push to strengthen domestic chip production.
