Nvidia CEO: China chip ban 'deeply painful' as $15 billion in sales have been lost as a result
Nvidia CEO Jensen Huang, at the Computex trade show in Taipei on Monday, said the Trump administration's ban on its H20 chips for China has cost the company $15 billion in sales.
During an interview with technology analyst Ben Thompson, Huang called the ban "enormously costly" and "deeply painful." He pointed to the $5.5 billion in charges the company expects to see in its first fiscal quarter due to the ban.
"No company in history has ever written off that much inventory," he said. "[N]ot only am I losing $5.5 billion — we wrote off $5.5 billion — we walked away from $15 billion of sales and probably ... $3 billion worth of taxes."
Wall Street analysts had projected that Nvidia could see anywhere between a $10 billion and $16 billion hit to revenue over the coming quarters from the most recent export ban on its H20 chips.
Nvidia has repeatedly updated its chips for the Chinese market in the past several years to comply with ever-tightening US trade restrictions, making the chips less and less powerful with each new iteration.
The latest ban on exports of its chips last month came just as the US government said it was investigating Nvidia over the use of its AI chips in China. It cited the release of a cheap AI model from Chinese startup DeepSeek powered by Nvidia's prior-generation H800s, which are currently banned from export to the country.
Huang implied Nvidia can't make another AI chip with its Hopper architecture for China under the current restrictions: "[T]hat’s the limit of what we can do to Hopper, and we've cut it down to there's not much left to cut," he said. "Anybody who thought that one chess move to somehow ban China from H20s would somehow cut off their ability to do AI is deeply uninformed."
He added that the China AI market is worth $50 billion a year. "China's doing fantastic, 50% of the world's AI researchers are Chinese and you're not going to hold them back, you're not going to stop them from advancing AI," he told Thompson, who published the interview in his newsletter, Stratechery.
Last week, the Financial Times and Reuters said Nvidia is looking to open a research and development center in China, which a person familiar with the matter confirmed in an email to Yahoo Finance.
Read more: How does Nvidia make money?
Just as Nvidia's H20 chips were banned, Chinese tech giant Huawei was rushing to fill the gap. Huawei is reportedly set to ship chips more powerful than Nvidia's H100s.
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