Nvidia faces a challenging reality as the Trump administration imposes new licensing requirements for its H20 chips, essential for sales in China. This regulatory change forces Nvidia to anticipate a $5.5 billion loss in its upcoming financial quarter, due to the expectation that these restrictions will be long-term. Despite previous efforts to negotiate with Trump, including a pledge for substantial investment in U.S. data centers, the company suffers further hits to its market value, reflecting broader uncertainties associated with its revenue prospects.
With its market cap already down 20% this year, the company watched its shares plunge another 6% in after-hours trading on Tuesday.
Nvidia CEO Jensen Huang recently dined with Trump and pledged to spend hundreds of billions on new U.S. data centers, but that wasn't enough to avoid a license requirement.
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