Nvidia Faces $5.5 Billion Loss Amid Escalating U.S.-China Trade Tensions

Nvidia has announced a projected financial impact of $5.5 billion due to new U.S. export restrictions on its H20 AI chips to China. The U.S. Commerce Department has imposed indefinite licensing requirements on these chips, citing national security concerns over their potential use in Chinese supercomputers.

The restrictions have led to a significant downturn in Nvidia’s stock, with shares falling nearly 6% and the company’s market value decreasing by over $148 billion. Advanced Micro Devices (AMD) also reported an anticipated $800 million charge due to similar export controls on its MI308 chips.

In response to the export limitations, Nvidia plans to invest up to $500 billion over the next four years to manufacture AI supercomputers domestically, including facilities in Arizona and Texas. Former President Donald Trump has praised this move as a victory for U.S. manufacturing.​

Analysts express concerns that these restrictions may inadvertently benefit Chinese competitors, such as Huawei, by limiting access to U.S. technology.​