Nvidia did not warn at least some of its main clients about the new US export standards, which it learned a week ago, which requires you to obtain licenses to sell your artificial intelligence chip centered on China, according to two sources familiar with the matter.
The American chip manufacturer revealed on Tuesday that US officials had informed the company on April 9 that their H20 chip would require an export license for sales to China.
The decision to restrict H20 shipments marks Washington’s last effort to limit China’s access to advanced semiconductors, while the United States seeks to maintain its advantage in artificial intelligence technology.
The main Chinese cloud services companies still anticipated H20 deliveries by the end of the year, without being aware of imminent restrictions, according to the two sources, who affirmed that the NVIDIA sales team in China did not seem informed before the public announcement. They spoke on condition of anonymity due to the delicacy of the matter.
Nvidia refused to comment.
Export controls threaten the Nvidia business in China, one of its most important markets. Nvidia had obtained H20 orders worth $ 18,000 million since the beginning of the year, according to one of the two sources and a third.
China generated 17,000 million dollars in revenue, or 13% of the total sales of Nvidia, in its last fiscal year that ended on January 26.
Nvidia’s shares fell 6% in the operations after the closure of the market on Tuesday after the company said it would assume up to 5.5 billion dollars in charges in the first quarter that ends on April 27 due to the license requirement, that the US government told him on Monday that it would be indefinite.
The charges are associated with inventory, purchase commitments and reservations related to H20 products, the company said.
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Nvidia kept some Chinese clients in the dark on the new US restrictive measures against chips
Chinese technological giants, including Tencent, Alibaba and Bytedance, the owner of Tiktok, had increased the H20 chips orders in the middle of a growing demand for affordable models of companies such as the Deepseek startup, Reuters reported in February.
Alibaba, Bytedance and Tencent did not immediately respond to comments requests.
Alibaba’s shares fell 4.1% and those of Tencent fell 1.8% in Hong Kong operations on Wednesday.
The H20 is the main chip that NVIDIA can legally sell in China and was launched after the last round of US exports restrictions entered into force in October 2023.
Washington has banned exports of the most advanced Nvidia chips to China since 2022, worried that China can use advanced technologies to develop their military capacities.
H20 restrictions could benefit Chinese artificial intelligence chips manufacturers, particularly Huawei, which offers products that compete with the Nvidia line, analysts said.
“When restricting the H20 system, US regulators are effectively pressing Chinese clients in Nvidia to opt for Huawei’s artificial intelligence chips,” said Nori Chiou, Investment Director of White Oak Capital Partners, based in Singapore.
“It is likely that the chips design and Huawei software capabilities progress quickly as more clients and development experience win,” Chiou added.
With Reuters information.
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