Nvidia does not expect the U.S. government to ease its chip export restrictions to China anytime soon. CEO Jensen Huang confirmed to CNN on Thursday that the company will exclude China from its revenue and profit forecasts moving forward.
Export Controls and Financial Impact
The U.S. administration recently imposed licensing requirements for Nvidia’s H20 chips, the company’s most advanced AI processors authorized for sale in China. This restriction came into effect in April and is expected to impact Nvidia’s revenue significantly.
In its first-quarter earnings report, Nvidia projected an $8 billion revenue loss in the second quarter due to these export controls.
Huang expressed skepticism about any near-term reversal of the export controls, saying that while a policy change would be a “nice bonus,” Nvidia is not counting on it.
When asked about the China market’s exclusion from forecasts, a Nvidia spokesperson referred back to Huang’s statements during the company’s Q1 earnings call.
Author’s Opinion
Nvidia’s decision to exclude China from its near-term financial forecasts shows prudence in a highly uncertain geopolitical environment. The company is adapting to the reality that regulatory hurdles and trade restrictions may persist longer than anticipated. While China remains a crucial market for chipmakers, Nvidia’s cautious stance ensures that investors have a clear picture of potential revenue challenges. This approach reflects a broader trend of tech companies navigating complex global politics while maintaining growth through diversified markets.
