As Nvidia studies 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 as a consequence of licensing necessities impacting its capacity 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 because of the restrictions.
When the U.S. licensing requirement was initially introduced in April, the corporate stated that it anticipated $5.5 billion in associated expenses for Q1.
Nvidia additionally stated 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 big toll.
Within the firm’s Q1 earnings name, CEO Jensen Huang stated that the corporate is at present 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 without doubt one of the world’s largest AI markets and a springboard to world success with half of the world’s AI researchers primarily based there; the platform that wins China is positioned to steer globally as we speak,” Huang stated. “Nonetheless, the $50 billion China market is successfully closed to us. The H20 export ban ended our Hopper information heart enterprise in China. We can not cut back Hopper additional to conform.”
The corporate has been outspoken towards the Trump administration’s push to restrict the export of U.S.-made AI chips to nations, together with China. Huang praised the administration’s latest choice to scrap Joe Biden’s Synthetic Intelligence Diffusion Rule that might have imposed additional chip-export restrictions.
Regardless of Biden’s chip-export guidelines not coming to bear, Nvidia is clearly not proof against the Trump administration’s try to stifle China’s AI market.
“The query isn’t whether or not China can have AI; it already does,” Huang stated. “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.
