NVIDIA says that new US restrictions on flea exports to China could cost the company $ 5.5 billion, because Washington tightens license rules for advanced AI equipment sales. The flea manufacturer said that the costs are linked to the inventory, purchase commitments and related reserves.
“The (US government) said that the license requirement meets the risk that covered products can be used or diverted to a supercaluler in China,” wrote the chip manufacturer in a file American Commission for Securities and Exchange. He added that the license requirement would be in place “for the indefinite future”.
The US government said the license rule aims to prevent Chinese superordinators from using the NVIDIA advanced tokens, citing national security risks. The United States wish to maintain its sovereignty on the flea market by blocking China from access to advanced Nvidia equipment, which is important for the management of advanced AI models. In addition to financial motivations, the country has also raised concerns about the development of China AI for military purposes.
The deposit comes just after NVIDIA announced that it would expand operations in the United States With TSMC, winning praise from the White House. It is also a technological partner in the Stargate projectA joint venture that will contribute $ 500 billion over four years to AI infrastructure in the United States.
Another chapter of the battle of years between the United States and China for flea supremacy
The license obligation marks the first official restriction on flea exports as part of the Trump administration, but it is only the last American measure in a fight in China. In 2022, the country applied its first set of export controls linked to fleas on the sale of semiconductors in Beijing and prohibited Nvidia separately from selling its most advanced chips to Chinese companies.
In response, NVIDIA has developed the A800 and H20 fleas specific to China which were in accordance with new controls, which allows it to maintain customers in the country. China has also applied export controls to articles related to gallium and Germanium which are essential in the production of fleas.
SEE: China investigates Nvidia for having pretended to break the monopoly law
In the second half of 2024, the Biden administration imposed two other sets of export restrictions on semiconductors, closing some of the escapes that Nvidia has exploited and expanding the list of prohibited technologies. China then quickly prohibited the sale of germanium and gallium in the United States, closing the gaps in its export controls in 2023.
On January 13, 2025, President Joe Biden proposed Flea export restrictions Not only for China but for a wide range of countries, compliance is not necessary before May. Nvidia was vocally opposed to this and, just this week, a certain number of Republican senators sent a letter to the Secretary of Commerce, Howard Lunick, exhorting him to withdraw the “too restrictive” rule before it was in force.
License requirements will erode the activity of Nvidia
NVIDIA was informed on April 9 that the sales of its H20 chips and fully in memory or an interconnection bandwidth to China will be subject to the new license requirements. “This kills Nvidia's access to a key market, and they will lose ground in the country,” said Patrick Moorhead, technological analyst with Moor Insights & Strategy, said The New York Times. He added that Chinese companies will buy instead at the local Huawei rival.
NVIDIA Chinese revenues have decreased regularly due to previous American export rules. Sales from China represented 26% of its total income in 2022, falling to 17% in 2024, according to Marketwatch. The analyst of Bernstein Research, Stacy Rasgon, estimated that the share would be around 13% by the end of 2025, even before the last license restrictions take effect.
Chinese companies, including Tencent, Alibaba and the parent company of Tiktok, Bytedance, had ordered an increasing number of H20 fleas to support the deployment of Deepseek AI modelswhich has gained popularity for their profitable performance, According to Reuters.
A spokesperson for the Commerce Department told NYT that license requirements will also be applied to sales of the MI308 chip of micro devices advanced in China to “protect the national and economic security of the United States”.
