Nvidia expects $5.5 billion in losses due to shipment of chips to China from the US

(AFP) Nvidia informed the US financial markets regulator on Tuesday that it expects a loss of $5.5 billion this quarter due to a new licensing requirement on its main chip that can be legally sold in China.

U.S. officials informed Nvidia last week that it must obtain licenses to export its H20 chips to China due to concerns that the chips could be used in supercomputers there, the Silicon Valley company stated in a filing with the Securities and Exchange Commission (SEC).

Nvidia shares, which have already seen volatility since Trump’s April 2 tariff announcement, dropped more than 6% in after-market trading.

The new licensing rule applies to Nvidia’s graphics processing units (GPUs) that have bandwidth comparable to the H20.

The U.S. had previously banned the export of Nvidia’s most advanced GPUs to China, which are designed to power high-end artificial intelligence models.

Nvidia has been notified that the licensing requirement for its H20 chips will remain in place indefinitely, according to the notice.

Nvidia's current fiscal quarter ends on April 27.

"First quarter results are expected to include up to about $5.5 billion of charges associated with H20 products for inventory, purchase commitments and related bookings," Nvidia said in the notice.