Monday, October 27, 2025

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.

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