News
Shortly after announcing a massive $500 billion AI investment in the U.S., NVIDIA said it would take a $5.5 billion charge after the U.S. restricted exports of its H20 AI chip to China, according to Reuters and Bloomberg.
The Bloomberg report suggests that NVIDIA’s $5.5 billion writedown signals it could lose out on $14–18 billion in annual revenue. Furthermore, if U.S. restrictions stay in place, NVIDIA’s data center sales in China could shrink back to early 2024 levels—just low to mid-single digits—before H20 production ever ramped up, the report adds.
Despite its lower compute power, the H20 still sparks U.S. concerns over potential use in Chinese supercomputers, which prompts Washington to take action, the reports indicate.
It is worth noting that in addition to NVIDIA’s H20, the U.S. Commerce Department on Tuesday announced new export licensing rules for AMD’s MI308 AI chips and similar products as well, according to Reuters.
As per Reuters, NVIDIA was notified by the U.S. government on April 9 that exporting the H20 to China would require a license, and on April 14, the company is reportedly told that these restrictions would remain in place indefinitely.
NVIDIA told Reuters that the $5.5 billion charge stems from unsold H20 inventory, purchase commitments, and related reserves.
Notably, the report indicates that Tencent has already installed H20 chips in a facility used to train a large AI model, possibly violating U.S. export rules. Another system used by DeepSeek to train its V3 model may also breach the same restrictions, the report adds.
Amid threats of further chip curbs and the booming demand for low-cost AI models in China, Tencent, Alibaba, and ByteDance had reportedly been snapping up H20, the most advanced NVIDIA AI chip allowed to be sold in the market. The latest move from the U.S. government not only leaves NVIDIA in a difficult spot but also puts China’s AI ambition in jeopardy.
Read more
(Photo credit: NVIDIA)
