Nvidia's quarter, China charge

Nvidia said on May 28, 2025 that it took a $4.5 billion hit tied to new China export-license rules, even as quarterly revenue climbed to $44.1 billion. (investor.nvidia.com) The company’s data-center unit, which sells the chips used to train and run artificial intelligence systems, brought in $39.1 billion in the quarter ended April 27, 2025. Nvidia said total revenue rose 69% from a year earlier and 12% from the prior quarter. (nvidianews.nvidia.com) Nvidia said the U.S. government told it on April 9, 2025 that exports of its H20 chip to China would require a license. The company said that change left it with excess H20 inventory and purchase commitments, producing the $4.5 billion charge. (investor.nvidia.com) The H20 was Nvidia’s made-for-China artificial intelligence chip, designed to comply with earlier U.S. limits while still serving Chinese customers. Nvidia said it booked $4.6 billion in H20 sales before the new licensing rule took effect and could not ship an additional $2.5 billion of H20 revenue in the quarter. (investor.nvidia.com) Jensen Huang used the results to argue that Washington’s chip curbs are helping Chinese rivals. At Computex in Taipei in May 2025, he said U.S. export controls had cut Nvidia’s China market share to 50% from 95% and pushed China to build domestic alternatives faster. (cnbc.com) On Nvidia’s earnings call a week later, Huang said China would “move on” with or without Nvidia and warned that shutting U.S. companies out would leave more room for local hardware. CNBC reported that Huang called the restrictions a policy that had “effectively closed” China to Nvidia’s data-center products. (cnbc.com) The U.S. case for the restrictions is national security, not Nvidia’s sales. Critics of Huang’s argument said the controls are intended to limit China’s access to advanced computing power for military and strategic uses, even if that costs U.S. companies business. (cnbc.com) That left Nvidia reporting two stories at once: demand from cloud companies and other artificial intelligence customers kept pushing revenue higher, while China rules erased billions of dollars from a single quarter. The company’s non-GAAP gross margin was 61.0%, down from the level it said it would have posted without the H20 charge. (nvidianews.nvidia.com) Huang kept pressing the China case after the quarter closed. In a May 6, 2025 interview with CNBC, he said the China artificial intelligence market could reach about $50 billion and called being blocked from it a “tremendous loss.” (cnbc.com)