As Washington tightens licensing requirements for sales of advanced AI hardware, NVIDIA claims that the new US restrictions on chip exports to China could cost the company$ 5.5 billion. The intel claimed that the cost is related to associated resources, purchase pledges, and products.
In a registration to the U.S. Securities and Exchange Commission, the intel stated that the permit requirement addresses the possibility that the included products might be used in, or diverted to, a computer in China. The license condition would still be in place” for the endless future,” it added.
The US government cited national security risks as justification for the registration rule, which states that it aims to stop Chinese supercomputers from using NVIDIA’s cutting-edge chips. By preventing China from using NVIDIA’s cutting-edge equipment, which is crucial for running advanced AI models, the US is determined to maintain its hold on the chip industry. The nation has raised concerns about China developing artificial intelligence for military purposes in addition to its economic motivations.
The issuing comes shortly after NVIDIA announced that it would start expanding its US businesses with TSMC, which received applause from the White House. Additionally, it is a technology companion in the Stargate Project, a joint venture that will invest$ 500 billion in American AI system over the course of four years.
Another book in a decades-long conflict between the US and China over chip supremacy
The Trump administration’s first official ban on chip imports is the passport condition, but it is only the most recent US rule in a years-long battle with China. The nation placed its first set of chip-related import restrictions on the sales of semiconductors to Beijing in 2022, and it also outlawed NVIDIA from selling its most cutting-edge cards to Chinese businesses.
NVIDIA responded by creating cooperative A800 and H20 cards that were specific to China and made them compliant with the new regulations, keeping consumers in the nation. Additionally, China placed trade restrictions on products containing chromium and germanium, which are necessary for chip production.
Notice: China Has Investigates NVIDIA for allegedly violating the Monopoly Laws
The Biden administration added two more pieces of export restrictions to semiconductors in the next quarter of 2024, easing some of the security gaps NVIDIA exploited and extending the list of prohibited systems. China finally soon lifted its 2023 export controls that had closed any gaps in its ability to sell germanium and gallium to the US.
President Joe Biden proposed more device import restrictions on January 13, 2025, with adherence not required until May, for China and a wide range of nations. A number of Republican lawmakers wrote to Commerce Secretary Howard Lutnick this week to urge him to remove the “overly limiting” concept before it comes into effect. NIVIDID was openly opposed to this.
Registration requirements did hurt NVIDIA’s reputation.
On April 9, NVIDIA received a notification that China will have to comply with the new licensing requirements for the sale of its H20 cards and any similar in memory or wire bandwidth. According to Patrick Moorhead, a technical analyst with Moor Insights &, Strategy,” This kills NVIDIA’s exposure to a vital market, and they will lose momentum in the country.” Otherwise, he added, Taiwanese companies will purchase from local rival Huawei.
Due to earlier US trade regulations, NVIDIA’s China profit has been steadily declining. According to MarketWatch, sales from China accounted for 26 % of its total revenue in 2022 and dropped to 17 % in 2024. By the time the most recent registration restrictions go into effect, according to Bernstein Research scientist Stacy Rasgon, the share would be approximately 13 % by 2025.
Google, Alibaba, and TikTok parent company ByteDance, all of which were Chinese companies, had been placing orders for an increasing number of H20 cards to support the use of DeepSeek’s AI models, which Reuters reported were becoming well-known for their cost-effectiveness.
To” safeguard ( theUS’s ) national and economic security,” a spokesman for the Commerce Department’s spokesman told the NYT that licensing requirements will also be applied to sales of the MI308 chip from Advanced Micro Devices to China.
