Nvidia has become the major victim of President Donald Trump’s ban on the sale of advanced chips to China.
Speaking on the issue, Nvidia warned that it faces a $5.5 billion financial hit after the Trump administration blocked the sale of its key H20 artificial intelligence chips to China. That development surprised Nvidia’s investors and sent its shares tumbling in the after-hours trading period.
The H20 chip, developed specifically for the Chinese market to meet US export regulations, will now require a special licence to be sold there “for the indefinite future”, according to a regulatory filing released on Tuesday. According to The Guardian, Washington cited concerns that the chips could be used in or diverted to Chinese supercomputers, escalating the tech standoff between the two powers.
As a result, Nvidia expects to take a $5.5 billion drop in revenue in its current quarter, tied to unsold inventory and unmet sales obligations in China. The announcement wiped around 6% off Nvidia’s share price after markets closed, with billions in market value to be lost in the next market opening.
Nvidia, which has been at the heart of the AI boom and seen its shares surge over 1,400% since 2020, is now facing serious geopolitical hurdles. The news of the chip sales ban triggered a massive sell-off in semiconductor stocks: AMD fell 7% in after-hours US trading, while in Asia, Samsung and SK Hynix dropped up to 3%. Europe’s ASML slumped 5%, missing Q1 order expectations by €1 billion, with its CEO warning of growing macroeconomic volatility.
Though semiconductor firms were initially spared from Trump’s 10% tariffs, further duties are expected to affect them any time soon. Meanwhile, the US Commerce Department has started probing chip and pharmaceutical imports over national security concerns.