Nvidia revealed on Tuesday the Trump administration’s tighter export controls on computer chips will cost the company $5.5 billion.
In a filing Tuesday with the Securities and Exchange Commission (SEC), Nvidia said it will take a $5.5 billion charge for the exporting of its H20 graphics processing units to China. Exports of a similar bandwidth are also subject to the same licensing requirements, according to the filing.
The licensing requirements are related to the risk that Nvidia’s products would be “used in or diverted to” a supercomputer in China, the company wrote.
Shares of the tech company dropped by 7 percent on Wednesday amid the news. Advanced Micro Devices, a competitor chipmaker, dropped about 6 percent after it revealed in a separate filing that export controls could result in a charge of about $800 million in “inventory, purchase commitments and related reserve,” the Associated Press reported.
The Commerce Department confirmed to the AP on Wednesday it rolled out new export licensing requirements for Nvidia’s H20 and AMD’s MI308 chips, as well as “their equivalents.”
