Leading chipmaker Nvidia (NVDA) says it will take a quarterly charge of $5.50 billion U.S. tied to exports of its H20 graphics processing units (GPUs) to China.
The charge comes after the U.S. government told Nvidia it needs a license to export the chips to China and several other overseas destinations.
News of the billion-dollar charge has analysts and investors worried that Nvidia’s growth could be slowed by increased export restrictions on its microchips and semiconductors.
The stock of Nvidia is down 6% in premarket trading, dragging the Nasdaq Composite index lower along with it.
The administration of U.S. President Donald Trump has said that Nvidia’s chips can be used to develop supercomputers for military purposes by China and other countries.
Nvidia reports fiscal first-quarter results on May 28, which is when the $5.5 billion U.S. charge is expected to impact the company’s financials.
The H20 is an artificial intelligence (AI) chip that was specifically designed for sale to China and to comply with U.S. export controls.
The H20 chip generated about $15 billion U.S. in revenue for Nvidia in 2024.
Nvidia CEO Jensen Huang said on the company’s last quarterly earnings call in February that revenue from China has been cut nearly in half due to increasingly tight export restrictions.
Huang has also warned that competition in China is growing, and Nvidia now lists Chinese technology firm Huawei as a competitor in its annual report.
China is currently Nvidia’s fourth-largest market by sales after the U.S., Singapore and Taiwan. More than half of the company’s sales go to U.S.-based companies.
Nvidia has argued repeatedly that further controls on its chip sales around the world will stifle competition and potentially erode U.S. competitiveness in technology.
In announcing the $5.5 billion U.S. charge, Nvidia said that it has been told by the U.S. government that the license requirements for H20 chips will remain in effect “for the indefinite future.”
The stock of Nvidia is down nearly 20% this year and currently trading at $112.20 U.S. per share.
Tech Insider
