US Cracks Down on Nvidia AI Chip Exports to China

April 19, 2025 | 11:51 pm

TEMPO.CO, Jakarta - The United States has again tightened export restrictions on artificial intelligence (AI) chips to China. Nvidia announced on Tuesday, April 15, 2025, that the U.S. government has blocked the sale of some of its AI chips to China without a license, and will now require permits for similar transactions in the future.

This move marks the first major restriction imposed by President Donald Trump's administration on the sale of semiconductors abroad, while tightening export rules previously implemented by Joe Biden.

As a result of the new policy, Nvidia has recorded potential losses of US$5.5 billion for this quarter. The losses are derived from H20 chip stocks, purchase commitments, and other reserves that can no longer be sold to China.

The company mentioned that these restrictions have a strategic impact, not just financial. Nvidia has relied on the Chinese market as a crucial area for expanding its AI chip business. If it has to exit the market, the company is concerned about losing its dominant position and allowing Huawei to take over.

“This kills Nvidia’s access to a key market, and they will lose traction in the country,” said Patrick Moorhead, a technology analyst from Moor Insights & Strategy, cited from The New York Times, Friday, April 18, 2025. “Chinese companies are just going to switch to Huawei.”

The U.S. Department of Commerce has announced new export requirements for Nvidia H20 chips, MI308 chips from Advanced Micro Devices, and similar products. “The Commerce Department is committed to acting on the president’s directive to safeguard our national and economic security,” said spokesperson Benno Kass.

Nvidia's announcement came one day after the company received praise from the White House for pledging to invest US$500 billion in AI infrastructure in the United States. In this commitment, Nvidia will produce servers in Houston and partner with chip packaging companies in Arizona.

However, according to Nvidia's regulatory filing, the investment pledge came after the Trump administration privately informed the company that the sale of AI chips to China would be mandated through licenses. The government then confirmed that the rules would apply for an unspecified time.

This move occurred just a few weeks after Nvidia CEO Jensen Huang attended a dinner with President Trump at Mar-a-Lago, costing US$1 million per person. Following the meeting, rumors circulated that the government would relax the restriction plans. However, the policy remained in place.

Since the beginning of his presidency, the Trump administration has been committed to reducing U.S. support for Chinese AI companies. Threats from startups such as DeepSeek, which develop AI systems at much lower costs than U.S. companies, have also raised concerns in Washington.

Throughout 2023, Nvidia reported sales worth US$17 billion to China. However, the Chinese market's proportion of the company's total revenue has decreased from 20 percent to 13 percent due to ongoing restrictions imposed by the U.S. government.

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