Nvidia expects to lose billions in income resulting from H20 chip licensing necessities
As Nvidia stories earnings for the primary quarter of its fiscal 12 months 2026, which closed on April 28, the corporate has launched numbers on how the Trump administration’s latest chip-export restrictions are affecting enterprise.
Nvidia reported that it incurred a $4.5 billion cost in Q1 resulting from licensing necessities impacting its potential to promote its H20 AI chip to firms in China. The chipmaker additionally reported that it was unable to ship an extra $2.5 billion of H20 income within the quarter as a result of restrictions.
When the U.S. licensing requirement was initially introduced in April, the corporate mentioned that it anticipated $5.5 billion in associated fees for Q1.
Nvidia additionally mentioned Wednesday that the H20 licensing necessities will lead to an $8 billion hit to the corporate’s income in Q2, which is predicted to be round $45 billion — a major toll.
Within the firm’s Q1 earnings name, CEO Jensen Huang mentioned that the corporate is presently exploring methods to nonetheless compete in China’s AI market however that, for now, it has to take a write-off for its H20 chips.
“China is among the world’s largest AI markets and a springboard to world success with half of the world’s AI researchers based mostly there; the platform that wins China is positioned to guide globally right this moment,” Huang mentioned. “Nevertheless, the $50 billion China market is successfully closed to us. The H20 export ban ended our Hopper knowledge heart enterprise in China. We can not scale back Hopper additional to conform.”
The corporate has been outspoken in opposition to the Trump administration’s push to restrict the export of U.S.-made AI chips to international locations, together with China. Huang praised the administration’s latest resolution to scrap Joe Biden’s Synthetic Intelligence Diffusion Rule that will have imposed additional chip-export restrictions.
Regardless of Biden’s chip-export guidelines not coming to bear, Nvidia is clearly not resistant to the Trump administration’s try to stifle China’s AI market.
“The query is just not whether or not China could have AI; it already does,” Huang mentioned. “The query is whether or not one of many world’s largest AI markets will run on American platforms. Shielding Chinese language chip makers from U.S. competitors solely strengthens them overseas and weakens America’s place.”
This piece has been up to date to incorporate commentary from Nvidia’s earnings name.