NEW YORK (Reuters) - Nvidia stock sank as much as 6% early Wednesday after the AI chipmaker disclosed that it would take a $5.5 billion hit from the U.S. government’s surprise new controls on its semiconductor exports to China.
Nvidia said in a regulatory filing late Tuesday night that the U.S. government informed the company it would require a special license for exports of its H20 chips made specifically for the Chinese market to comply with U.S. trade rules.
Notably, no licenses for GPU shipments into China have ever been granted, given the U.S. government’s concern that the chips could be used to build AI supercomputers in the country, Jefferies analyst Blayne Curtis wrote in an analysis following the news that the latest rule is effectively a ban.
Other Wall Street analysts noted the move was a “surprise,” given a recent report from NPR that the Trump administration had backed off its plans to restrict Nvidia’s H20 chips following a dinner with CEO Jensen Huang at Mar-a-Lago.
Nvidia said it will incur $5.5 billion in charges in its first quarter from the latest curb.