Chip Crackdown: US Halts Nvidia’s H20 AI Exports to China
The United States has imposed an indefinite ban on the export of Nvidia’s popular H20 AI chips to China, a move that has reportedly cost the company $5.5 billion, according to Reuters. Following the announcement, shares of Nvidia dropped by 6%, while rival AMD saw a 7% decline in its stock value.
The US Department of Commerce stated that a new license will now be required to export Nvidia’s H20 chips, AMD’s MI308, and other equivalent processors. The US government fears that these high-performance chips could be used to develop supercomputers that pose a threat to national security.
Chinese tech giants such as Tencent, Alibaba, and ByteDance had already placed orders for the H20 chips. Demand had particularly surged among Chinese startups like Deepseek. While the H20 is relatively slower in training performance, it is efficient in "inference"—a key segment in the current AI chip market.
US authorities claim that the chip’s high-speed memory and connectivity capabilities could enable China to build supercomputers that have been prohibited under current export regulations. Nvidia noted that the estimated financial impact stems largely from inventory, purchase agreements, and reserves related to these chips.
