Nvidia said it is taking a $5.5 billion financial hit after the U.S. government imposed new restrictions on the export of its H20 artificial intelligence chips to China.
The H20 was released in 2024, following strict U.S. restrictions, allowing it to continue selling in the Chinese market. The chip has relatively low processing power compared to the H100 model, which is already banned from being exported to China.
The H20 chip is said to have played a key role in developing R1, an innovative AI model similar to ChatGPT, by Chinese company DeepSeek. The latter was reportedly developed at a significantly lower cost than its American counterparts. The development has sparked a massive backlash in the tech industry, seen as a boost to China’s AI industry.
