Nvidia said on Tuesday that it would incur $5.5 billion in charges after the US government restricted exports of its H20 artificial intelligence chip to China, a key market for the chip.
Nvidia’s AI chips have been a major target of US export controls, as officials aim to prevent the most advanced chips from reaching China in an effort to maintain a lead in the AI race.
Nvidia's shares fell by about 6 per cent in after-hours trading on Tuesday.
The US Commerce Department said it is introducing new licensing rules for exporting advanced chips, including Nvidia's H20 and AMD's MI308, to protect national and economic security.
AMD did not immediately comment, but its shares also dropped by 7 per cent after the announcement.
More from TechFor Nvidia, the H20 is its most advanced chip available in China and plays a key role in its business there. Major Chinese tech companies like Tencent, Alibaba, and ByteDance had been increasing their orders for the chip, especially to support growing demand from AI startup DeepSeek.
The H20 chip isn’t as fast at training AI models as Nvidia’s top chips sold outside China. However, it performs well in inference — the stage where AI models give answers to users. Inference is quickly becoming the most important part of the AI chip market.
Nvidia CEO Jensen Huang recently said the company is in a strong position to lead this shift.
