Nvidia expects $5.5 billion loss due to U.S. export restrictions on AI chips to China

With export restrictions tightening, Nvidia faces a significant $5.5 billion loss, impacting both its revenue and the broader tech market amidst existing tariff tensions with China.

Sources:
Radio Free AsiaInvestorsApnews+1
Updated 1h ago
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Cause And Effect

Market reactions and analysts' responses to Nvidia's loss

'manageable' for Nvidia. Strong sales of Blackwell processors in the U.S. and other unrestricted markets will help offset the loss of the H20 sales.
Vivek Arya
BofA Securities analyst
Investors
Anticipated charge for AMD
$800 million
Investors
Key Facts
  • Nvidia's H20 chip gained attention after DeepSeek, a Chinese AI startup, showcased a competitive model using it.Radio Free Asia
  • Advanced Micro Devices (AMD) is also affected, anticipating a charge of up to $800 million due to sales restrictions.Investors

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Midday Trends

Market impact from Nvidia's expected loss

Increased costs for Nvidia due to export controls
$5.5 billion
Apnews
Percentage drop in Nasdaq Composite
1.9%
Seekingalpha
Percentage drop in S&P 500
1.1%
Seekingalpha
Points drop in Dow
171
Seekingalpha
Percentage drop in Dow
0.4%
Seekingalpha
Key Facts
  • On Wednesday, technology stocks led a broader market slide as Nvidia's loss news unfolded.Seekingalpha
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Background Context

Nvidia's H20 chip export restrictions and financial predictions

Expected loss for Nvidia
$5.5 billion
Radio Free Asia
Key Facts
  • The U.S. has imposed restrictions on the export of Nvidia’s H20 chips to China, working to pressure Beijing amid a tariff battle.Radio Free Asia
  • As a consequence, Nvidia anticipates a loss of approximately US$5.5 billion in Q1 of its fiscal year.Radio Free Asia
  • The H20 was the most advanced artificial intelligence chip legally exportable to China, faced already with U.S. curbs on high-end semiconductors.Radio Free Asia

Other Facts in these Reports

Trump Administration effectively bars Nvidia from selling AI processors to China.
Investors
Export license now required for H20 processor sales in China.
Investors
New Licensing Requirements are stated to be indefinite by the government.
Apnews
AMD's export controls could lead to significant charges.
Apnews
Commerce Department introduces new licensing requirements.
Apnews
Tech companies struggle despite efforts to please the Trump administration.
Seekingalpha
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