Just recently, the press discussed concessions made by the current American authorities to Nvidia, which allegedly promised to invest $500 billion in the development of American computing infrastructure in exchange for the opportunity to maintain supplies of H20 accelerators to China, but the day before it became clear that it would not be able to do this without a special export license.
Image source: NVIDIA
Considering that it will be almost impossible to obtain it from the US Department of Commerce, it is appropriate to talk about a ban on the supply of H20 accelerators to China. Moreover, as Bloomberg reports, the company already intends to write off about $5.5 billion in the form of inventories of these accelerators, which it was preparing to send to China, as well as paid supply contracts. At least this amount will have to be written off in the current quarter, and it is difficult to predict what impact this ban will have on Nvidia’s financial performance in the future. The need to obtain an export license for H20 supplies to China will remain for Nvidia “for an indefinite period in the future,” as noted in the company’s official statement.
The US authorities once again motivated their de facto ban on H20 supplies to China by the fact that these accelerators can be used to create supercomputers. Nvidia shares fell by 6.3% against this backdrop. In addition to China itself, as well as Macau and Hong Kong, the new export restrictions on the supply of H20 accelerators will affect Syria, Sudan, North Korea, Iran and Cuba. Bloomberg Intelligence analysts suggested that as a result of these restrictions, Nvidia will lose annual revenue of $14 to $18 billion. In the server segment, the company will depend on the Chinese market for less than 5% of its revenue, as it was at the beginning of 2024.