Nvidia faces potential $5.5 billion loss from new restrictions on beefy…

Amid discussions about tariffs impacting products entering the United States, it’s essential to remember the strict guidelines concerning the export of chips out of the country. Recently, Nvidia disclosed that new export restrictions may lead to significant financial losses for the company. According to the Associated Press, Nvidia’s SEC filing indicated that the company anticipates up to $5.5 billion in charges related to H20 products for inventory, purchase commitments, and related reserves in the first quarter.

The United States government informed Nvidia on April 9 that an export license is required for sending “H20 integrated circuits and any other circuits achieving the H20’s memory bandwidth, interconnect bandwidth, or combination thereof” to China. Subsequently, on April 14, 2025, Nvidia received notification that the license requirement would be in place indefinitely. This development signifies a challenging situation for Nvidia as it faces substantial charges due to the new regulations.

The H20, a modified version of the powerful H100 GPU known for its ‘Grace Hopper’ architecture, holds a significant place in data centers alongside ‘Ada Lovelace’ RTX 40-series processors. Despite the introduction of the ‘Blackwell’ architecture chips succeeding Hopper models, the Hopper chips remain prevalent and operate in server infrastructure across major technology companies.

Initially designed to comply with China’s export restrictions, which first emerged in 2022 and limited the export of potent chips like the H100, the H800, and A800, the H20 represents a scaled-down alternative. As the most potent AI chip accessible to China, the H20 was a crucial product for the market. However, with the recent announcement in Nvidia’s SEC filing, even the H20 will require a license from the US government for export to China, placing severe restrictions on access to this powerful chip.

Repercussions of violating export regulations have already been seen in the tech industry, with companies facing significant fines as penalties for non-compliance. For instance, TSMC could face over $1 billion in fines for alleged breaches of export regulations after one of its chips was discovered in a Huawei processor. Despite the financial blow of the $5.5 billion charges, Nvidia remains committed to investing $500 billion in US-based chip production to strengthen its AI infrastructure in the country.

As the chip industry navigates through new export rules and looming semiconductor tariffs, uncertainties loom over the sector, including the AI industry. While PC gaming tech may seem a step removed from these developments, it remains interconnected within the broader chip industry landscape. Nvidia’s ability to continue investing in future technologies like the RTX 50-series remains crucial, despite the financial challenges posed by the recent export restrictions.