Nvidia warns curbs are backfiring
Nvidia's CEO warned that U.S. export restrictions on chips may accelerate Chinese self‑reliance, and the company disclosed a $5.5 billion charge tied to H20 restrictions and said it lost $2.5 billion in H20 sales in one quarter with an expected $8 billion hit next quarter. (economictimes.indiatimes.com) Observers note Chinese chipmakers are reporting record revenues and that restrictions have boosted domestic demand, suggesting policy is reshaping global supply dynamics. (tomshardware.com)
Jensen Huang is warning that Washington’s chip curbs are not freezing China out of artificial intelligence so much as forcing it to build around Nvidia. (economictimes.indiatimes.com) Huang made the case in an April 15 interview with Dwarkesh Patel, saying China already has chip fabrication, researchers and data centers, and that blocking U.S. sales will not stop Chinese artificial intelligence development. (dwarkesh.com) (economictimes.indiatimes.com) The immediate hit to Nvidia is measurable. On April 15, 2025, the company said it expected a roughly $5.5 billion quarterly charge after the U.S. government told it on April 9 that H20 chip exports to China would require a license. (cnbc.com) When Nvidia reported results on May 28, 2025, it said the actual first-quarter H20-related charge was $4.5 billion, that it had shipped $4.6 billion of H20 sales before the rule change, and that it could not ship another $2.5 billion of H20 revenue in the quarter. (nvidianews.nvidia.com) Nvidia also said China had been a major business even under earlier restrictions. The H20 was the most advanced artificial intelligence chip Nvidia could still sell there, and CNBC reported it generated an estimated $12 billion to $15 billion in 2024. (cnbc.com) The policy fight is about more than one product line. Huang said the real contest is over software ecosystems, arguing that keeping Chinese developers on Nvidia’s CUDA tools helps preserve U.S. technology standards even when the hardware sold there is less capable. (economictimes.indiatimes.com) The U.S. case for the controls has been national security. Nvidia said the government’s rationale for the H20 license rule was the risk that the chip could be used in, or diverted to, a supercomputer in China. (cnbc.com) (nvidianews.nvidia.com) Chinese chipmakers, meanwhile, are reporting the kind of growth Huang says the curbs encourage. CNBC reported this month that Semiconductor Manufacturing International Corp. posted record 2025 revenue of $9.3 billion, Hua Hong reported record quarterly revenue of $659.9 million, and analysts expect further gains in 2026 as domestic buyers shift toward local suppliers. (cnbc.com) Analysts told CNBC that U.S. restrictions have added “rocket fuel” to Chinese chip demand and helped local companies fill a domestic computing gap, even if their processors still trail top U.S. graphics chips on peak performance. (cnbc.com) Nvidia is still growing fast outside China, with first-quarter fiscal 2026 revenue of $44.1 billion and data-center revenue of $39.1 billion. Huang’s warning is that a market this large will not stay empty for long if U.S. companies are locked out of it. (nvidianews.nvidia.com)
