Nvidia Corp. (NASDAQ:NVDA) has reportedly not communicated to some of its major Chinese customers about the new U.S. export rules affecting its AI chip.
What Happened: U.S. officials informed Nvidia on April 9 that its H20 chip would now require an export license for sales to China. Despite this, the chipmaker did not share this crucial information with some of its key customers in China, who were anticipating H20 deliveries by year-end, reported Reuters.
The new export rules are a part of Washington’s ongoing efforts to restrict China’s access to advanced semiconductors and maintain U.S. dominance in AI technology. These restrictions could significantly affect Nvidia’s business in China, one of its largest markets.
A spokesperson for Nvidia declined to comment when contacted by Benzinga.
Why It Matters: The new export rules are expected to hit Nvidia’s bottom line. The chipmaker is set to take a $5.5 billion charge this quarter due to halted shipments of its H20 GPUs to China and several other markets.
The H20 is the main chip that Nvidia is legally allowed to sell in China, introduced following the implementation of the latest U.S. export restrictions in October 2023. According to analysts, Chinese AI chipmakers, especially Huawei, could benefit from the limitations placed on H20 as it offers alternatives to Nvidia’s product range.
Benzinga's Edge Rankings highlight strong momentum and growth rankings for Nvidia in the 77th and 95th percentiles, respectively. Curious how other stocks stack up? Click here to uncover growth and momentum scores for top stocks.
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