Jensen Huang: Nvidia loses 15 billion US dollars due to China ban
Nvidia is writing off H20 chips worth 5.5 billion US dollars. The company boss estimates the loss of sales at 15 billion.
Nvidia's AI accelerator H100, from which the H20 model is derived.
(Image: Nvidia)
The extended US export restrictions to China are set to cost Nvidia dearly. Company boss Jensen Huang cites a total loss of sales of 15 billion US dollars in the coming quarters. For example, Nvidia is no longer allowed to sell the slimmed-down AI accelerator H20 to China.
In April, Nvidia already announced that it would have to write off H20 accelerators worth 5.5 billion dollars. Analysts subsequently estimated the loss of sales at between 10 billion and 16 billion dollars – Huang now places himself at the upper end of the range.
CUDA weakened
Huang suggests in a podcast with Stratechery that the move away from the Chinese market will accelerate the development of an ecosystem there. “The Chinese market is worth about 50 billion dollars a year. […] Giving that up, the revenue that comes with it, the scaling that comes with it, the ecosystem building that comes with it …”
“Anyone who thinks that a move to somehow exclude China from H20s will take away their ability to develop AI is deeply uninformed,” says Huang. He also raises a sensitive point: The US would miss out on 3 billion dollars of taxpayers' money.
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Meanwhile, Nvidia could continue to benefit indirectly from the high demand for AI accelerators in China. For many months now, there have been repeated accusations and speculation that chips are still being sent to China via neighboring Asian countries. Nvidia could record corresponding sales via Singapore, for example. The company repeatedly assures that it complies with export laws.
Even with the loss of 15 billion dollars over several quarters, Nvidia should continue to do very well. In the most recently reported fiscal quarter alone, Nvidia generated 36.6 billion dollars in revenue from server hardware – 93 percent of which came from GPUs, including AI accelerators. Nvidia will publish its next annual report on the evening of May 28.
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