Nvidia has encountered major restrictions from the U.S. government, which has blocked some sales of its artificial intelligence chips to China unless a license is obtained. This move marks the first significant limitation from the Trump administration on semiconductor exports and threatens Nvidia's sales, particularly as the company has fought hard to maintain its position despite previous rules imposed by the Biden administration. Facing a projected $5.5 billion loss from unsellable inventory, Nvidia's inability to compete in China could allow its rival, Huawei, to gain an edge in A.I. chip sales.
Nvidia will take a $5.5 billion charge against its revenue in the current quarter due to restrictions on A.I. chips sales to China.
The write-down is a bigger strategic blow than financial one, as Nvidia relies on the Chinese market to remain competitive.
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