Nvidia Faces $5.5B Charge as U.S. Considers AI Chip Tracking Bill, China Market Nears $50B

25 posts • GPT (4.1)

Updated May 7, 2025, 12:03 PM

Nvidia CEO Jensen Huang has warned that U.S. export controls on artificial intelligence (AI) chips could result in the loss of a $50 billion market opportunity in China within the next two to three years. Huang stated that being unable to compete in China would forfeit significant revenue, tax contributions, and job creation in the United States. He described the missed opportunity as 'Boeing-sized' and noted that China's AI market currently accounts for roughly 14% of Nvidia's revenue, or $17.1 billion last financial year. The U.S. government, under the Trump administration, has tightened restrictions on the export of Nvidia’s advanced AI chips, including the H20 model, to China. Nvidia is facing a $5.5 billion quarterly charge related to these restrictions. Despite these measures, reports indicate that Nvidia chips continue to reach China through third-party channels. U.S. Representative Bill Foster (Democrat, Illinois) is preparing legislation that would require post-sale tracking of AI chips, such as those made by Nvidia. The bill would mandate that chips be equipped with location-tracking systems to ensure they are only used in approved regions, and would allow regulators to disable chips operating outside permitted areas. The proposed legislation has bipartisan support and aims to address large-scale unauthorized exports of AI chips to China, despite existing controls. Foster and other lawmakers argue that tracking technology is already available and could be implemented to enforce export rules more effectively. Huang has argued that restricting chip sales to China will not halt the country’s technological progress, as domestic competitors such as Huawei—described by Huang as 'one of the most formidable technology companies in the world'—are poised to fill the gap. He has urged the U.S. government to reconsider the restrictions, warning that the loss of access to China’s rapidly expanding AI market would undermine U.S. industry. Nvidia currently holds about 90% of the high-end AI chip market and has a market capitalization near $3 trillion.

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Sources

cnbc.com(3)finance.yahoo.com(3)marketwatch.com(2)jp.reuters.com(2)

Paul Triolo

@pstAsiatech

For Nvidia, losing China’s AI market would be ‘tremendous loss’, CEO says Yes, a complete and total own goal, with no clear national security gains.... https://t.co/weD2vcwbjK via @scmpnews

华尔街日报中文网

@ChineseWSJ

Nvidia CEO Huang Renxun clearly urged the Trump administration to re-examine its chip restrictions on China. He said that Nvidia will abandon a market worth 50 billion US dollars as a result, and these restrictions cannot stop China's military development. Huang Renxun also said that China's Huawei is “very powerful” and will fill any gaps left by Nvidia. https://t.co/SiKCyI6WPT

Markets Today

@marketsday

$NVDA #Nvidia's CEO Jensen Huang Stated That China's AI Market Is Expected to Grow to About $50 Billion in the Next Two to Three Years, Losing Access to It Would Be a 'Tremendous Loss' - CNBC