Today, Nvidia announced that the White House’s recent restrictions on the export of its H20 artificial intelligence chips to China will lead to a cost of $5.5 billion. Following the announcement, Nvidia’s shares have dropped significantly.
Washington’s latest chip regulations aim to keep the U.S. at the forefront of the AI race. The H20 chip is thought to be key to DeepSeek’s successful development of its ChatGPT-like reasoning AI model, R1, which is significantly cheaper than its American counterparts.
The H2O chip was initially developed to navigate the stricter export measures that the U.S. government imposed on China.
In today’s official filing, the company wrote: “On April 9, 2025, the U.S. government, or USG, informed NVIDIA Corporation, or the Company, that the USG requires a license for export to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent therein, of the Company’s H20 integrated circuits and any other circuits achieving the H20’s memory bandwidth, interconnect bandwidth, or combination thereof.”
Nvidia added, “The Company’s first quarter of fiscal year 2026 ends on April 27, 2025. First quarter results are expected to include up to approximately $5.5 billion of charges associated with H20 products for inventory, purchase commitments, and related reserves.”
Experts consider the restrictions a “strategic blow” to Nvidia’s efforts to keep engaging with its Chinese customers.
By CEO NA Editorial Staff
