NVIDIA to lose billions in H20 GPU sales, Jensen warns of an AI backfire

President Trump's new export guidelines went into effect in April, and NVIDIA, the GPU powerhouse that is powering the massive push into AI through providing the necessary hardware to fuel data centers, is expected to feel the hit from the new trade restrictions.

2

According to reports, NVIDIA is set to be effectively cut off from the Chinese datacenter market, but it will still manage to realize approximately $4.6 billion of the ordered $7.1 billion worth of H20 GPUs in Q1. Moreover, NVIDIA lost $2.5 billion in H20 sales in Q1 and will have to reduce expected revenue by another $8 billion in Q2. The bleeding doesn't stop there, as NVIDIA will be unable to fulfill purchase commitments in Q1 for H20 iunventory that equates to $4.5 billion.

Despite the loss in revenue, NVIDIA CEO Jensen Huang praised the Trump administration's decision to unwhind the Biden Administration's AI Diffusion plan, as it would have cost NVIDIA even more money, as previous administrations plan was to implement a cap on AI chips to the rest of world, essentially setting a fixed number for NVIDIA's sales. Despite the trade restrictions, NVIDIA isn't going to give up on the market entirely, with Huang saying the company is currently exploring ways to still compete.

"China's AI moves on with or without US chips. It has the compute to train and deploy advanced models. 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," Huang said. "Shielding Chinese chip makers from US competition only strengthens them abroad and weakens America's position."