Nvidia suffers a $4.5bn loss due to export restrictions

Nvidia revealed during its earnings call that it had taken “a multi-billion-dollar charge” due to US advanced-semiconductor export restrictions.

The artificial-intelligence (AI) chipmaker had previously downgraded the Hopper AI accelerator to comply with US import restrictions. While President Donald Trump recently revoked The Framework for Artificial Intelligence Diffusion (BIS-19459060) from the US Bureau of Industry and Security, which entered into force in April this year, affected Nvidia’s exports of their H20 AI accelerators to China.

Nvidia reported that it incurred a $4.5bn loss in the first quarter fiscal 2026 due to excess inventory of H20 and purchase obligations, as demand for H20 decreased. It reported that sales of H20 products for the first fiscal quarter of 2026 were $4.6bn before the new export licensing requirements. It said that it was unable ship an additional $2.5bn in H20 revenue during the first quarter.

A transcript of the earnings conference call shows that the company was unable to ship an additional $2.5bn in H20 revenue during the first quarter. According to a post on Seeking Alpha (19459060), denying Nvidia access to the AI market of China would have an adverse impact on its business. CFO Collette Krass stated that if the export controls had not been implemented, Nvidia could have received orders for the H20 AI Accelerator Hardware worth $8bn.

She added, “Losing the access to the China AI Accelerator market, which, we believe, will grow to almost $50bn in value, would have an adverse impact on our future business and benefit our competitors in China and around the world.”

One of Kress’ remarks in her prepared statement appears to be aimed directly at the US Administration. She said that the export restrictions only spurred China to innovate and scale up its AI capabilities. She added: “The question now is whether one the world’s biggest AI markets will run American platforms.” Jensen Huang is the founder and CEO of Nvidia. He said that his company is experiencing “incredibly high” demand for their AI acceleration hardware.

“AI agents are becoming mainstream and the demand for AI computing is going to accelerate,” he said.

Comparing AI chips to electricity, he said: “Countries all over the world are recognising AI is essential infrastructure, just like electricity and internet.” He added that Nvidia was at the forefront of this profound change.