According to the Financial Times, Nvidia announced on Tuesday that it would accrue losses of US$5.5 billion due to the US export controls on H20 chips. However, industry insiders pointed out that the actual impact of this export control on Nvidia's revenue may exceed 10 billion US dollars.
Nvidia CEO Jensen Huang
The $5.5 billion in losses Nvidia said were mainly the cost of purchasing materials to fulfill related orders, as well as fines and operating expenses incurred for failing to deliver according to agreed terms. The person familiar with the matter estimated that Nvidia’s actual affected revenue in China may exceed US$10 billion.
In addition, Nvidia was also caught off guard by the Trump administration’s new export control measures.Two people familiar with the matter said that Nvidia originally thought that its H20 chip would be able to obtain an exemption from the U.S. government.Nvidia executives felt they would not be subject to tighter export controls after meeting with Trump at Mar-a-Lago earlier this month. Moreover, Nvidia’s plan to invest US$500 billion in the United States also impressed Trump.As a result, Nvidia told Chinese customers such as Alibaba, ByteDance and Tencent that H20 orders would not be affected.
In contrast, Intel told Chinese customers last week that they would need to apply for a license to sell some of its advanced AI processors.
As of press time, Nvidia had declined to comment. Intel has not yet responded to a request for comment.