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US Imposes Licensing Requirements on Nvidia H20 AI Chips for China Exports

The new restrictions, citing national security concerns, are projected to cost Nvidia $5.5 billion and accelerate China's domestic chip development.

Analysts say US chipmakers like Nvidia, whose CEO Jensen Huang is seen here, will face intensified competition from China and other countries due to new constraints imposed by the US government on chip sales to China
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Overview

  • The Trump administration has mandated indefinite licensing requirements for Nvidia's H20 AI chips to be exported to China, citing concerns over their potential use in Chinese supercomputers.
  • Nvidia estimates the restrictions will result in a $5.5 billion revenue loss, while AMD projects up to $800 million in financial impact due to similar export controls on its MI308 GPUs.
  • Analysts warn the measures could backfire by accelerating China's efforts to develop domestic AI chip alternatives, with companies like Huawei and SMIC leading the charge.
  • Chinese tech giants, including ByteDance, Alibaba, and Tencent, reportedly stockpiled H20 chips earlier this year in anticipation of the export crackdown.
  • The effectiveness of US export controls depends heavily on cooperation from allies like the Netherlands and Japan, key players in the global semiconductor supply chain.