Nvidia warned that it expects a $5.5 billion hit to its revenue after the Trump administration blocked sales of its China-specific AI chips, a move that could reshape the global chip race and deepen the technology rift between the US and China.
In a regulatory filing, Nvidia said it had been notified that the US government would now require a license to export its H20 chip to China — a chip it had designed to comply with earlier restrictions. The company said it would be unable to sell or fulfill existing H20 orders, prompting a multi-billion-dollar write-down of inventory and contracts.
The decision comes just days after Nvidia pledged to invest $500 billion in US AI infrastructure — a move praised by the White House. But behind the scenes, the Trump administration had already informed the company it was tightening export controls.
“This kills Nvidia’s access to a key market,” said Patrick Moorhead, an analyst at Moor Insights & Strategy. “Chinese companies are just going to switch to Huawei.”
The US Commerce Department confirmed the new export licensing requirements, which also apply to rival AMD’s MI308 chip. “We are committed to acting on the president’s directive to safeguard our national and economic security,” spokesperson Benno Kass said.
The blow lands as Nvidia faces rising pressure from Chinese firms like Huawei and DeepSeek, the latter of which recently unveiled a powerful AI model reportedly built at a fraction of the cost of its US counterparts.
In 2023, China accounted for 13% of Nvidia’s revenue, down from around 20% the year before. The H20 chip — a modified version of its flagship H100 — had been Nvidia’s attempt to salvage access to the Chinese market under existing restrictions.
Now, even that window is closing.
Notably, the crackdown follows a high-profile Mar-a-Lago dinner between Nvidia CEO Jensen Huang and Trump — a meeting that sparked speculation that the administration might ease its stance. Instead, pressure only mounted.
Senator Elizabeth Warren urged the administration to act swiftly in a letter to Commerce Secretary Howard Lutnick, warning that Chinese tech giants were stockpiling chips while US startups struggled to acquire them.
The fallout could be long-term. As Nvidia retreats from China, analysts warn that domestic players like Huawei could fill the vacuum — and emerge as global competitors.
