Nvidia Faces Significant Costs due to US Restrictions on AI Chips Exports to China

Chipmaking giants Nvidia and AMD saw their stock prices drop after-hours trading following Nvidia’s announcement of potential $5.5 billion in charges associated with its AI chip inventory due to US export restrictions affecting its business with China. The restriction stems from the US government requiring licenses for Nvidia’s popular H20 integrated circuits destined for China, citing concerns about their potential use in supercomputers. Nvidia stated these restrictions will likely result in significant costs to the company’s first quarter financial report.