Nvidia’s Revenue Outlook: Billions at Risk from H20 Chip Licensing Changes
As Nvidia prepares its financial results for Q1 of fiscal year 2026, it reveals the impact of recent chip-export restrictions imposed by the Trump administration on its business operations. The company disclosed a staggering $4.5 billion charge due to licensing requirements that have hindered its ability to sell the H20 AI chip to Chinese companies. Additionally, Nvidia was unable to generate another $2.5 billion in potential revenue from H20 thanks to these restrictions.
Initially, when the licensing requirement was made public in April, Nvidia estimated facing charges of about $5.5 billion for the quarter. Looking ahead, the company anticipates that the licensing conditions will result in an $8 billion revenue loss in Q2, projected revenue for which stands at around $45 billion.
During the earnings call, CEO Jensen Huang expressed concern about competition in the Chinese AI market, emphasizing its significance: “China is one of the world’s largest AI markets… However, the $50 billion China market is effectively closed to us.” Huang remarked that the export ban has effectively halted Nvidia’s Hopper data center business in China.
Nvidia has publicly criticized the Trump administration’s strategy to limit the export of U.S.-produced AI chips to countries, including China. Huang previously lauded the administration’s decision to reverse Biden’s proposed AI regulations that could have further restricted chip exports.
Despite Biden’s regulations not being enacted, Nvidia finds itself grappling with the consequences of these export controls. Huang noted, “The question is not whether China will have AI; it already does. The question is whether one of the world’s largest AI markets will run on American platforms.”
For more details, you can follow the developments here.
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