Following the ban on export of artificial intelligence chips, Nvidia lost $ 1.5 billion

Following the restrictions imposed by the US government on the export of Nvidia’s H20 artificial intelligence chips to China, the company announced that it would be damaged by $ 1.5 billion. The US company has faced a decline in the value of its stock, a similar situation in AMD, which has been in trouble due to the same sanctions on its Mi308 chip.

A spokesman for the US Department of Commerce, who is responsible for overseeing its export control, said the ministry is “committed to action on the basis of the president’s order to protect US national and economic security.”

The H20 AI is one of the Nvidia products designed specifically for customers in China, where the artificial intelligence industry is flourishing and progressing. Among the companies that have increased their order for the H20 are Tencent, Alibaba and ByTedance, all of which are Chinese technology giants.

The H20 chip has less processing power than some other Nvidia chips designed for markets outside China, as its main focus is on the inference and the process of providing a quick response by artificial intelligence models. Nvidia had previously set up its chip architecture in response to the bans imposed by the previous Biden government, but it seems that the effort is no longer important.

The US government has expressed concerns about using the H20 chip in superconductors. Although the chip is less processing, multiple chips can still bring high speeds. An independent research center in Washington has released a report showing that Tencent has already used H20 chips to train its models. This could circumvent export sanctions and end for the benefit of Chinese companies.

NVIDIA announced Tuesday that the US government has informed the company that the export of the H20 chip requires a license and that these regulations will be implemented in an unlimited manner. Nvidia says the $ 1.5 billion costs for H20 products include inventory, purchase obligations and reserves. According to Reuters, the news came after Nvidia announced its commitment to build $ 5 billion in artificial intelligence servers in the United States over the next four years. The move is in line with the Trump administration’s efforts to boost domestic production.