TMTPOST -- Nvidia Corporation CEO Jensen Huang on Monday cautioned the leading chipmaker lose tens of billions in sale in China due to the latest export ban on advanced artificial intelligence (AI) chips imposed by the Trump administration.

Credit：Nvidia

The additional ban on Nvidia’s H20 is “deeply painful” as the company has written off $5.5 billion, Huang said in in a Stratechery interview published on Monday, adding that “no company in history has ever written off that much inventory.” Then he said the ban suggested a $15 billion loss in sales.

“[The export ban] Its costs are enormously costly, not only am I losing $5.5 billion, we wrote off $5.5 billion, we walked away from $15 billion of sales and probably — what is it? — $3 billion worth of taxes,” Huang said.” The China market is about $50 billion a year and it’s not $50 million, it’s $50 billion. $50 billion is like Boeing, not the plane, the whole company.”

Huang suggested Nvidia has to change its product portfolio in the Chinese market due to the ban on H20 chips. “That’s the limit of what we can do to Hopper, and we’ve cut it down to there’s not much left to cut,” the chief executive said.

Huang acknowledged that the ban is a real threat to the Compute Unified Device Architecture (CUDA) in the long run. CUDA is a computing platform that has made it easier for deelopers to create complex programs and enabled Nvidia to build a community of developers key to maintaining its lead in AI.

"Anybody who thought that one chess move to somehow ban China from H20s would somehow cut off their ability to do AI is deeply uninformed," said Huang. He continued: ““If we don’t compete in China, and we allow the Chinese ecosystem to build a rich ecosystem because we’re not there to compete for it, and new platforms are developed and they’re not American at a time when the world is diffusing AI technology, their leadership and their technology will diffuse all around the world.”

H20, which is modified to have lower performance than other Nvidia chips, is the most advanced AI chips that Nvidia can export to China under the current export rules. Many in the semiconductor industry had feared the H20 chip would be one of new targets of the U.S. government because it is one of the chips that Chinese AI upstart DeepSeek used to train its popular reasoning AI model R1.

Nvidia disclosed on April 9 that it was  informed by the U.S. government the same day that the government requires a license for export to China, including its two special administrative regions Hong Kong and Macau, of the company’s “H20 integrated circuits and any other circuits achieving the H20's memory bandwidth, interconnect bandwidth, or combination thereof.” 

The U.S. government indicated the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China, according to the filling. Nvidia in the filling thus estimated its first quarter of fiscal year 2026 ending on April 27 will see about $5.5 billion of charges regarding H20 products associated with H20 products for inventory, purchase commitments, and related reserves.

Nvidia later April said that the U.S. government on April 21 informed Nvidia the licence requirement will be in effect for the indefinite future.

It was reported last week that Nvidia is planning a new AI research center in China in the face of U.S. export curbs. The Financial Times said Huang has plans to launch a new AI research and development (R&D) center in Shanghai. The CEO was said to predict China could generate $50 billion in Nvdidia’s revenue, up from around $17 billion in fiscal year 2024, in a matter of years. The new center is said to be designed to address address complex technical requirements under White House restrictions while keeping chip design and production offshore to protect intellectual property, or IP. It also reportedly aims to optimize existing products and explore adjacent markets like autonomous driving.

During his visit to China in April, Huang discussed the plan of AI center with Shanghai’s mayor, who welcomed it and offered to provide support, the Wall Street learned from anonymous sources. The new facility is expected to help Nvidia beef up its teams that study and convey the demand of Chinese customers to its headquarters, and help it design products competitive in China and compliant with U.S. rules, per the report.

In meeting with Chinese Vice Premier He Lifeng in Beijing, Huang expressed optimism about the economic prospects of China and the willingness to continue to deepen presence in the Chinese market and play an active role in promoting U.S.-China economic and trade cooperation, the state news agency Xinhua reported.

In the meeting with Ren Hongbin, chairman of the China Council for the Promotion of International Trade, Huang said  the increased restriction imposed by the U.S. government has impacted Nvidia “significantly” as China is a very important market for the chipmaker. Huang emphasized that China is a very important market for Nvidia and expressed the company's willingness to continue cooperation with China, according to a report by China Central Television (CCTV).

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