Nvidia project $5.5 billion Loss as U.S. government tightens AI chips Export
The company anticipates a loss of $5.5 billion in its first fiscal quarter following the revised policy aimed at its H20 chips.
Nvidia will experience a significant financial setback after the U.S. government imposes new restrictions on its exports of AI chips to China.
The company anticipates a loss of $5.5 billion in its first fiscal quarter following the revised policy aimed at its H20 chips.
The ongoing conflict between the U.S. and China over technology intensified such drawdowns. It signals that the U.S. is limiting access to the most advanced AI training chips and enforcing stringent restrictions on less sophisticated chips that may still pose risks to national security.
The United States has revealed that Nvidia will need a special export license to sell its H20 chips to China “for the future.”
This marks a substantial shift in policy. The H20 chip was introduced as a temporary alternative after export regulations were enacted in 2022 to prevent Nvidia’s most powerful AI chip shipments to China.
The H20 is designed only for less sensitive tasks, such as inference (where AI systems analyze data and draw conclusions), as Nvidia made it less powerful and inefficient for AI model training (which requires much more robust and capable systems). Nvidia responded swiftly.
The company reported in a filing on Tuesday that it expects a write-down of approximately $52.5 billion. This figure includes unsold H20 inventory, canceled contracts, and expenses incurred on production and materials now tied up in chips that cannot be exported.
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