"Almost immediately after those controls were implemented, Nvidia began designing chips that would come as close as possible to U.S. limits while still being legal to sell in China." https://t.co/BWyuWxMA1W
— Ryan Evans (@EvansRyan202) April 15, 2025
The U.S. government has told Nvidia it will need a special license to export its H20 artificial intelligence chips to China. This is a big step in the growing tech fight between the U.S. and China. Nvidia said it will take a $5.5 billion hit because of the new rules.
The company’s shares fell after the news came out. The H20 chip was made last year under U.S. export rules so Nvidia could still sell to China. It is not as powerful as Nvidia’s top H100 AI chip.
🇺🇸🇨🇳 Nvidia faces $5.5 billion charge as US restricts chip sales to #China – Reutershttps://t.co/lQ04yQiX80
— Christophe Barraud🛢🐳 (@C_Barraud) April 16, 2025
Nvidia’s CEO appears to have convinced Trump to let it keep selling valuable AI chips to China, but that could put the US and Europe on the back foot, @parmy writes https://t.co/YKuFxrdPrT via @opinion
— Angela Zhang (@AngelaZhangHK) April 14, 2025
But the H20 chip helped China’s DeepSeek make a ChatGPT-like AI model called R1 for much less money than American versions. This started an AI boom in China. In a filing, Nvidia said the U.S. government told them H20 chips will now need a special permit to be sent to China.
🤮🤮 Nvidia's Mar-a-Lago Dinner Looks Like a Raw Deal for US AI. Nvidia’s CEO appears to have convinced Trump to let it keep selling valuable AI chips to China, but that could put the US and Europe on the back foot, @parmy writes https://t.co/YXi3Lbqcec via @opinion
— alain servais (@aservais1) April 14, 2025
So Nvidia will report about $5.5 billion in costs for the H20 chips when it posts earnings on May 28. Wedbush Securities analysts said the money impact may be small, but the rules are a big problem for Nvidia’s business with Chinese customers. They said it shows Nvidia now faces major hurdles selling to China.
The Commerce Department confirmed the new export rules for Nvidia’s H20 and AMD’s MI308 chips to China. “The Commerce Department is committed to acting on the President’s directive to safeguard our national and economic security,” a spokesperson said.
Nvidia faces export hurdles in China
Nvidia said the license rule would last indefinitely. It’s not clear how licenses will be given out. The company would not comment beyond its filing.
The Trump administration’s H20 chip limits were expected after DeepSeek’s R1 model had a global impact. This led U.S. lawmakers to call for tighter controls on AI chip exports. It has fueled an AI rush in China, with big investments pushing the country’s tech sector.
Chinese firms like Huawei and AI chipmaker Cambroon have made alternatives to Nvidia’s H20 chips, but they are usually slower. Experts think Nvidia’s better ecosystem and manufacturing will keep giving them an advantage. With the U.S.-China trade war ongoing, more restrictions are likely.
In 2022, President Biden began limiting sales of advanced chips from Nvidia and others to China, worried about military uses. The controls have grown to include chipmaking gear and products made with U.S. tech outside America. Nvidia has pushed back on the latest export curbs, warning they could slow innovation and economic growth worldwide.
Ned Finkle, Nvidia’s VP of government affairs, said AI adoption drives growth and opportunity globally, but the rules could put that at risk. As the U.S. and China ramp up their tech rivalry, firms like Nvidia are in the middle of a growing fight over AI dominance. The recent export limits signal tougher measures ahead that could reshape the global tech landscape.