Investing.com -- AI powerhouse NVIDIA (NASDAQ:NVDA) disclosed Tuesday that it anticipates up to $5.5 billion in charges in its upcoming first-quarter financial results related to inventory, purchase commitments, and associated reserves for its H20 microchip products.
The announcement follows the U.S. government's decision to mandate licenses for exports of the H20 chip to China, including Hong Kong and Macau, as well as to D:5 countries or companies with ultimate parent companies in those regions.
Shares of NVIDIA fell 6% in after-hours trading Tuesday following the news.
The disclosure from NVIDIA comes just one day after the company made headlines after announcing a $500 billion investment to produce NVIDIA AI supercomputers entirely in the U.S.
The U.S. government communicated to NVIDIA on April 9, 2025, that a license would be required for exporting the H20 integrated circuits, as well as any other circuits with similar memory and interconnect bandwidth capabilities.
The measure is intended to prevent the potential use or diversion of these products in Chinese supercomputers.
On April 14, 2025, it was further clarified that this licensing requirement would remain in place indefinitely.
NVIDIA's first fiscal quarter of 2026, ending on April 27, 2025, is expected to reflect the financial impact of these new export restrictions. The charges, which may total up to approximately $5.5 billion, stem from the H20 products that are now subject to the U.S. government's licensing requirements.
The H20 microchip has been popular in China, given the country couldn't access the higher power AI chips due to curbs.