Nvidia to suffer €4.8 billion in first-quarter losses due to chip ban in China
The Trump administration is limiting exports to the Asian giant of the component produced by the U.S. company.
BarcelonaNvidia, the artificial intelligence (AI) chip giant, expects to lose $5.5 billion (more than €4.8 billion) in the first quarter of this year due to the Trump administration's decision to require a license to export chips integrated into H2 to China. This move against China also affects Hong Kong and Macau.
The company has submitted the information to the US securities regulator, the SEC. In this communication, it explains that it was informed on April 9 of this restriction imposed by the Trump administration. This limitation also affects D5 countries (a series of states also subject to the arms export embargo, ranging from Afghanistan to Sudan to Syria) or companies headquartered or parent companies in these countries. The measure affects not only H20 integrated circuits, but all those that reach a bandwidth, interconnection, or a combination of the two variables of H20.
"The US government indicated that the licensing requirement poses a risk that covered products could be used in a supercomputer in China or diverted," Nvidia said in its SECA filing. Nvidia claims that it was informed by the US government last Monday that this restriction was in effect "indefinitely." This is what prompted the revision of its first-quarter forecasts. Upon hearing the news, the company's shares fell more than 6% in premarket trading, after closing higher on Tuesday.