Nvidia Fears A US$400 Million Hit In Potential China Sales Following New US Government Export Restrictions

NVIDIA (Nasdaq: NVDA) recently disclosed that the US government is imposing a new license requirement for semiconductor firms to export specific chips necessary for AI-related applications to China and Russia in anticipation that these might be used for military purposes.

In an SEC filing, the chipmaker relayed that the new restriction would affect the firm’s “A100 and forthcoming H100 integrated circuits.” This would also affect DGX or any other systems which incorporate the said products and the accelerator A100X.

The license is also required for any future integrated circuit that is at par or greater than the A100.

“A license is required to export technology to support or develop covered products. The USG indicated that the new license requirement will address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China and Russia,” the company said in its filing.

Following the news, the firm’s share price slumped almost 6% in after-hours trading.

Fellow chipmaker AMD also confirmed that it received the same notice from the US government affecting its own counterpart portfolio, which could include the competing MI200.

While Nvidia reiterated that it doesn’t sell products to Russian customers, the new restriction might take a hit on its US$400 million potential sales in China, a component it considered in making the guidance for fiscal Q3 2023 revenue guidance. The firm also said that this would affect the firm’s “ability to complete its development of H100 in a timely manner or support existing customers of A100 and may require the Company to transition certain operations out of China.”

In its fiscal Q2 2023 financials release, the firm announced that it expects Q3 2022 to generate US$5.90 billion (+/- 2%) in revenue, a huge drop from Q3 2022’s revenue of US$7.10 billion. 

The administration’s move is part of the policy shift to hamper China and Russia’s ability to make and use advanced chips for AI applications in the military.

“While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests,” the US Commerce Department said in a statement. “This includes preventing China’s acquisition and use of U.S. technology in the context of its military-civil fusion program to fuel its military modernization efforts, conduct human rights abuses, and enable other malign activities.”

The tech firm said that it will be reaching out the the government to seek exemptions for “internal development and support activities.”

NVIDIA last traded at US$137.97 on the Nasdaq.


Information for this briefing was found via Protocol and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

New Found Gold: The Strategic Maritime Resources Purchase

Amex Exploration: Revised Perron PEA Has INSANE Economics

Aris Mining: The Multi Billion Dollar Soto Norte PFS

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Nvidia Beats Q2 2024 Estimates As Firm Rallies On AI Boom

NVIDIA (Nasdaq: NVDA) exceeded market predictions on its Q2 2024 earnings report released on Wednesday...

Thursday, August 24, 2023, 08:38:54 AM

Strong Q3 Revenue Fails to Lift AMD as Stock Falls 7% on Weak AI Outlook

Advanced Micro Devices Inc. (NASDAQ: AMD) reported third-quarter results, showing a mix of achievement and...

Tuesday, October 29, 2024, 07:29:00 PM

Nvidia-Backed Firm Seeks Nuclear-Powered Site for AI Data Center in Japan

Ubitus K.K., a Tokyo-based cloud services company backed by Nvidia (Nasdaq: NVDA), is planning to...

Saturday, November 2, 2024, 11:29:00 AM

Nvidia: Analysts Anticipate $5.8 Billion In Q3 Revenues

Nvidia Corp (NASDAQ: NVDA) will be reporting their fiscal third quarter financial results May 26th...

Wednesday, May 26, 2021, 11:44:00 AM

Nvidia Rides On AI Boom With 80% Jump In Net Income In Q4 2024

Nvidia (NASDAQ: NVDA) reported its Q4 and full-year 2024 financials, with quarterly revenue of $39.3...

Thursday, February 27, 2025, 08:02:00 AM