Nvidia (NVDA) faces a $5.5B charge for restricted GPU exports to China, shares fall. CEO Jensen Huang meets Beijing officials and AI startup DeepSeek. CWEB News analyzes the impact of US chip tariffs and China’s AI ambitions.

$Chipgiant\; Nvidia(NVDA)disclosedastaggering??$5.5 billion charge linked to U.S. restrictions on AI GPU exports to China in an SEC filing Tuesday, sending its stock price tumbling 4% on Wednesday. The charge reflects lost revenue from its H2O graphic processing units, the only AI chips Nvidia can legally sell in China under current export rules. Rivals like AMD also saw declines as investors fear broader semiconductor sector risks.

Why It Matters:

• China Market Reliance: Nvidia generated $17 billion in 2024 China sales (20% of global revenue).
• New U.S. Tariffs: Stricter licensing rules for H2O GPUs and similar bandwidth chips threaten future exports.
• CEO Diplomacy: Nvidia CEO Jensen Huang is in Beijing meeting officials and AI startups to salvage partnerships.

Huang’s China Visit: Key Meetings
Per state broadcaster CCTV, Huang met:

1. Liang Wenfeng, founder of DeepSeek – a low-cost Chinese AI model rivaling U.S. tools like ChatGPT.
2. China Council for Promotion of International Trade officials to discuss trade barriers.

Huang called China “a very important market,” signaling Nvidia’s urgency to retain access. Analysts at CWEB News suggest his trip aims to lobby for tariff exemptions and explore compliant chip designs for China.

U.S. Scrutiny and DeepSeek’s Rising AI Threat
The Biden administration’s H2O GPU restrictions now face fresh scrutiny as lawmakers investigate whether Nvidia supplied export-controlled chips to startups like DeepSeek. Launched in January 2024, DeepSeek’s AI model outperforms Western rivals at lower costs, alarming U.S. officials about China’s rapid innovation.

CWEB News Analysis:

• Revenue Risk: The $5.5B charge highlights Nvidia’s vulnerability to U.S.-China tech wars.
• Strategic Shift: Expect Nvidia to accelerate “China-specific” chips to bypass export rules.
• Market Response: Shares may stay volatile until trade tensions ease.

What’s Next?

Nvidia’s stock recovery hinges on Huang’s ability to negotiate with Beijing and adapt to U.S. policies. Meanwhile, CWEB News warns Chinese firms like DeepSeek could reduce reliance on U.S. chips, reshaping the global AI supply chain.