Catenaa, Wednesday, April 16, 2025- Nvidia stock fell over 7% on Wednesday, after the company said that it would take a $5.5 billion hit from the new controls imposed by the US on its semiconductor exports to China.
Nvidia said in a regulatory filing late Tuesday night that the US government informed the company it would require a special license for exports of its H20 chips made specifically for the Chinese market to comply with US trade rules.
Nvidia stock fell by 7.63% by 1 o’clock in the afternoon, the stock is down by 22.64% for the year.
The H20 chip, released just last year, was specifically designed to accommodate stringent US export controls to China and allowed Nvidia to continue selling to Beijing.
The model has less computing power than the more powerful H100 AI chip, which has already been banned for sale to China.
The H20 is believed to have contributed to DeepSeek’s successful development of its ChatGPT-like reasoning AI model, R1, which was said to be trained at a fraction of the cost of American equivalents.
The $5.5 billion hit on the chipmaker accounts for about 13% of sales from last year.
Jefferies said no licenses for GPU shipments into China have ever been granted, given the US government’s concern that the chips could be used to build AI supercomputers in the country.
Jefferies projected the company will take an even bigger hit to revenue — $10 billion in lost sales — over the coming quarters.
