Nvidia’s hit with $5.5B loss due to chip export limits

Nvidia faces a $5.5 billion loss after new US export restrictions on its H20 chips to China and other regions. The new limits are part of an escalating US-China trade war, intensifying the global race for AI dominance.

Following the announcement, Nvidia’s stock dropped nearly 7% in after-hours trading.

The new curbs target chips vital to China’s AI developments, including DeepSeek’s R1 model, which has boosted the country’s AI tech growth.

The H20 chip—developed to comply with earlier US curbs, generated between $12-$15 billion in 2023. Under the new rules, Nvidia must now obtain a license to export these chips, with no timeline for when the restrictions might be lifted.

Although H20 performs slower than the H100 and H200 chips, it remains essential to China’s AI development.

Nvidia’s revenue from China has already halved, though the country remains its fourth-largest market.

Analysts warn the US restrictions could pose long-term risks to global trade. Nvidia’s first-quarter earnings are due May 28.