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Nvidia Faces $5.5 Billion Hit as U.S. Tightens China Export Controls

CEO Jensen Huang travels to Beijing for high-level talks, emphasizing China's market importance while navigating escalating trade challenges.

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Overview

  • The U.S. government imposed new licensing restrictions on Nvidia's H20 AI chips to prevent their use in Chinese supercomputers, citing national security concerns.
  • Nvidia announced a projected $5.5 billion earnings loss this quarter due to the restrictions, leading to a nearly 7% drop in its stock price on Wednesday.
  • CEO Jensen Huang is in Beijing, meeting with Chinese trade officials, including CCPIT head Ren Hongbin, to reaffirm Nvidia's commitment to the Chinese market.
  • The company emphasized its compliance with U.S. export rules, while analysts predict sales of the H20 chip to China could approach zero under the new restrictions.
  • Nvidia's China strategy is under scrutiny as the U.S.-China trade tensions escalate, with Congress probing potential violations of export rules linked to Chinese AI firms like DeepSeek.