Nvidia Faces Billions in Losses Due to U.S. Chip Export Restrictions on China

In a blow to the tech giant, Nvidia has reported significant financial losses due to the Trump administration's recent restrictions on exporting advanced AI chips to China.

In its Q1 2026 earnings report, Nvidia revealed that it incurred a $4.5 billion charge related to licensing requirements for its H20 AI chip. The company was also unable to ship an additional $2.5 billion worth of H20 revenue in the quarter due to the export controls.

Looking ahead, Nvidia expects an even bigger impact in Q2, projecting an $8 billion hit to revenue, which is predicted to be around $45 billion. CEO Jensen Huang called China "one of the world's largest AI markets" and a critical growth opportunity for the company.

"The $50 billion China market is effectively closed to us. The H20 export ban ended our Hopper data center business in China. We cannot reduce Hopper further to comply," Huang said.

The restrictions are part of the Trump administration's efforts to limit the export of U.S.-made AI chips to China, which it sees as a threat to American technological dominance. While the Biden administration recently scrapped plans for further chip export controls, the damage has already been done for Nvidia in the Chinese market.

"The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chip makers from U.S. competition only strengthens them abroad and weakens America's position," Huang warned.

Nvidia's financial woes underscore the high stakes and far-reaching consequences of the ongoing U.S.-China tech rivalry. As the global AI race heats up, American companies like Nvidia find themselves caught in the crosshairs of geopolitical tensions, with billions in potential revenue on the line.