Nvidia to Write-Off $5.5 Billion as US Expands Measures on China

Nvidia announced it would write off as much as $5.5 billion in the current quarter. The decision comes after the US started requiring an export license for its H20 chips shipped to China.

The chipmaker noted the government indicated the license requirement addresses the risk that the chips may be used or diverted to a supercomputer in China, and will be in effect for the indefinite future. The write-down will cover charges associated with H20 products for inventory, purchase commitments, and related reserves.

Nvidia reconfigured the H100 for China following US export controls introduced in October 2023 to slow the country’s ability to produce cutting-edge AI. The H20 is its top-end chip available in the country. The company saw a surge in demand for its H20 chips in late January as Tencent, Alibaba, and ByteDance increased orders as they shifted their AI development setups to copy DeepSeek’s low-cost LLM. Nvidia’s chip was not covered by US export licensing rules at the time.