Nvidia is expecting a big hit to its business as reports emerge of the White House imposing export restrictions on its H20 GPU (graphics processor unit) in China. The new restrictions appear to have been carried over from the previous administration’s policy to restrict access to AI chips and advanced AI models.
The Framework for Artificial Intelligence Diffusion from the US Bureau of Industry and Security (BIS), which was published January 15 2025, puts in place export administration regulation controls on advanced semiconductors. By imposing controls that allow exports, re-exports and transfers (in-country) of large quantities of advanced computing integrated circuits only to certain destinations and end users, BIS said the export controls could reduce the risk that malicious state and non-state actors gain access to advanced AI models.
At the time, Ned Finkle, vice-president for government affairs at Nvidia, posted a damning indictment of the former US administration’s attempts to curb semiconductor exports. In a blog post, he said: “In its last days in office, the Biden Administration seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review. This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems and even software are designed and marketed globally.”
Finkle described the Biden Administration’s approach as “attempting to rig market outcomes and stifle competition”, adding: “The Biden Administration’s new rule threatens to squander America’s hard-won technological advantage”, and said they “would do nothing to enhance US security”.
The new rules were set to come into effect on April 15, and appears that the Trump administration is not rescinding on the restrictions the Biden Administration had put in place. According to a news story on BBC, Nvidia has now said that the Trump administration has informed it that a licence will be required to export the H20 chip to China.
In the transcript of the company’s Q4 2025 earnings call, posted on Motley Fool, Nvidia chief financial officer Colette Kress noted that, as a percentage of its total datacentre revenue, datacentre sales in China remained well below levels seen on the onset of export controls. “Absent of any change in regulations, we believe that China shipments will remain roughly at the current percentage. The market in China for datacentre solutions remains very competitive,” she said.
While the company said it would continue to comply with export controls while serving its customers, its share price took a hit as a result of controls coming into effect.
The H20 is a less powerful Nvidia AI accelerator, designed for the Chinese market. According to Antonia Hmaidi, senior analyst at Mercator Institute for China Studies, Nvidia sold a million H20s to Chinese customers in 2024. While the Financial Times recently reported that Chinese rival, Huawei, has been ramping up production of its home-grown AI offering, the Ascend chip, Hmaidi noted that in 2024, it only shipped 200,000 units, which “reveals structural issues in China’s semiconductor industry”.
Hmaidi also noted that Huawei’s software lags behind Nvidia’s, with developers in China reluctant to adopt the chip for training most models.
The export changes affecting the H20 come just a day after the Trump administration announced Nvidia was leading what it described as an “American-made chips boom”.
Nvidia said that within the next four years, it plans to produce up to half a trillion dollars of AI infrastructure in the US through partnerships with TSMC, Foxconn, Wistron, Amkor and SPIL.
The company said it has started production of its Blackwell chips at TSMC’s chip plants in Phoenix, Arizona. It is also building supercomputer manufacturing plants in Texas, with Foxconn in Houston and with Wistron in Dallas. According to Nvidia, production at both plants is expected to ramp up in the next 12 to 15 months.
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