Nvidia Loses $4.5 Billion Due to China Export Restrictions

Nvidia's CEO, Jensen Huang, has recently moderated his efforts to lift export restrictions on the company's advanced H20 computer chips to China. Huang believes that the decision to remove these restrictions lies with both the U.S. and Chinese governments, as he has already done his part to influence, inform, and provide facts to the relevant authorities.

Huang has expressed concern that U.S. firms are missing out on the growing Chinese AI market, which could be worth $50 billion in three years. He also argued that Beijing already has access to Nvidia’s rival, Huawei, which could meet the country’s AI needs if U.S. firms fail to do so.

Nvidia has faced significant financial losses due to the export restrictions. The company lost roughly $4.5 billion from unsold H20 chips in May and stated that it would have raised its previous financial quarter sales by $2.5 billion without the export controls. The company also revealed that export restrictions to China lowered its market share in the country by nearly half and cost the company over $5 million.

Huang has emphasized that the firm can only recover these losses depending on the size of H20 orders and how fast it can meet the demand. Both countries had agreed in June to limit export restrictions on rare-earth minerals and also minimize the export controls of tech exports by the U.S. Nvidia revealed in a filing that it had halted the sales of the chips to China due to license requirements from the U.S. government. The firm said that the H20 chips could previously avoid export restrictions with their previous design.

Huang had previously met with President Donald Trump in Washington and championed that Nvidia would help with the administration’s goal to create jobs and boost onshore onboarding in the AI space. The tech company’s boss also said that Nvidia will ensure that the U.S. becomes the global capital of AI. According to the semiconductor manufacturer, the U.S. agreed to approve the export of the computer chips to China earlier this week.

Huang said his visits to both Washington and Beijing are aimed at showing Nvidia’s support for open-source research, foundation models, applications that can empower economies worldwide. The tech firm also revealed that Huang urged China’s government and industry officials on Tuesday and talked about AI’s benefits and ways it could advance the industry.

The president of the company said the development of AI models by Chinese companies like DeepSeek and Alibaba offers a positive outlook for H20 in the country due to its memory bandwidth. Huang also said he hopes the company will ship more advanced chips into China than the H20 because the technology is always evolving. He believes that the computer chips they send to Beijing will continue to advance over time.

Huang also addressed concerns about the potential military use of Nvidia's chips in China. He argued that the U.S. doesn’t have to worry about the H20 chips aiding the Chinese military, as U.S. restrictions on China will limit the tech at any time and that Beijing already has significant computing capacity to rely on American tech.

Huang has urged other countries to consider the U.S. technology stack and has emphasized the importance of adapting to export restrictions as the world keeps on changing. He believes that his role is to inform governments of the nature and unintended consequences of their policies.