NVDA Tumbles After Biden Blocks Chip Exports To China

It has not been a good week for Nvidia, and now it just got worse as shares are down over 5% in after-hours trading after the firm warned that new rules governing the export of A- chips to China may affect hundreds of millions of dollars in revenue.

In a regulatory filing Wednesday, the giant chipmaker that the U.S. has installed new license requirements for its A100 and forthcoming H100 integrated circuits — Nvidia’s highest-performance products for servers — in sales to China and Russia.

Nvidia’s filing specifically states that Nvidia’s forecast for the current quarter includes an expected $400 million in data-center sales to China that could be affected by the move; Nvidia does not currently sell products in Russia.

“The new license requirement may impact the company’s ability to complete its development of H100 in a timely manner or support existing customers of A100 and may require the company to transition certain operations out of China,” the SEC filing reads.

“The company is engaged with the [U.S. government] and is seeking exemptions for the company’s internal development and support activities.”

Nvidia said that the federal government’s new license requirements are meant to “address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China and Russia.”

“We are working with our customers in China to satisfy their planned or future purchases with alternative products and may seek licenses where replacements aren’t sufficient,” an Nvidia spokesperson said in an emailed statement to MarketWatch.

“The only current products that the new licensing requirement applies to are A100, H100 and systems such as DGX that include them.”

The company reportedly only received the notification on Aug. 26 and was already facing a sales slump, triggered by lower demand for personal computers.

Other US chipmakers (AMD and Intel) also saw shares decline in after-hours trading, though Nvidia appears to be the company most impacted by the decision.