Nvidia expects $5.5 billion in charges tied to the Trump administration's new export restrictions on H20 chips to China

Core Viewpoint - Nvidia anticipates up to $5.5 billion in charges due to new export licensing requirements for its H20 chips to China, as mandated by the Trump administration, which will impact the company's first-quarter earnings [1][2][4]. Group 1: Financial Impact - The expected charges include costs related to inventory, purchase commitments, and reserves for H20 products [2]. - Nvidia's stock fell more than 5% in after-hours trading following the announcement of these charges [2]. - The charges are not directly from exporting H20 chips but from those already manufactured that may be harder to sell under the new licensing requirement [4]. Group 2: Regulatory Context - The new export rule is seen by the current administration as a measure to mitigate the risk of China developing its own supercomputer [3]. - Nvidia's H20 chips were designed to comply with Biden-era export controls amid ongoing AI competition between the US and China [2][3]. - The Trump administration has initiated investigations into semiconductor imports to assess their impact on national security, potentially leading to tariffs on key tech goods [5]. Group 3: Strategic Commitments - Nvidia has reiterated its commitment to invest$ 500 billion in the US over the next four years, focusing on AI supercomputers and data centers [6]. - The White House has framed the new export rule as a success, referring to it as "the Trump Effect in action" [7].