- Wednesday, June 25, 2025
Chief financial officer Colette Kress has warned that export constraints are expected to cost about $8 billion in the current quarter
By: India Weekly
AI CHIP titan Nvidia reported a sales growth of 69 per cent in the first quarter on Wednesday (28), but warned of more risks in the technology conflict between the US and China.
Nvidia reported earnings that topped market expectations, with a $4.5 billion hit from US export controls being less than the Silicon Valley chip juggernaut had feared.
The company notified regulators in April that it expected a $5.5 billion hit in the recently-ended quarter due to a new US licensing requirement on the primary chip it can legally sell in China.
Nvidia chief financial officer Colette Kress warned in an earnings call that export constraints are expected to cost about $8 billion in the current quarter.
Nvidia conceded that restrictions on the use of open-source AI models from China such as DeepSeek and Qwen could hurt its business.
US officials had told Nvidia it must obtain licenses to export its H20 chips to China because of concerns they may be used in supercomputers there, the company said in a Securities and Exchange Commission filing.
Sales of the H20 in China earned Nvidia $4.6 billion in revenue as customers stockpiled the chips before the curbs set in. The China business accounted for 12.5 per cent of overall revenue.
“The question is not whether China will have AI – it already does. The question is whether one of the world’s largest AI markets will run on American platforms,” said Nvidia CEO Jensen Huang, later adding that “AI export controls should strengthen US platforms, not drive half of the world’s AI talent to rivals.”
Huang also argued that keeping Chinese open-source models such as DeepSeek and Qwen running on Nvidia chips provides U.S. firms with valuable insight on where the global AI industry is headed.
“U.S. platforms must remain the preferred platform for open-source AI,” he said. “That means supporting collaboration with top developers globally, including in China. America wins when models like DeepSeek and Qwen run best on American infrastructure.”
Huang also said that he agreed with a vision expressed by cabinet officials such as Commerce Secretary Howard Lutnick of bringing factories back to the United States and staffing them with robots.
“Future plants will be highly computerized in robotics. We share this vision,” Huang said.
Despite the China export curbs, Nvidia forecast sales of $45 billion, plus or minus 2 per cent, in the second quarter, only slightly below analysts’ average estimate of $45.90 billion, according to data compiled by LSEG.
Executives also highlighted deals worth potentially billions of dollars in the coming months and years in Saudi Arabia, the United Arab Emirates and Taiwan, leading analysts to conclude the impact of US-China trade tensions was not as bad as feared.
Nvidia shares rose 5.6 per cent before the bell on Thursday (29), leading a rally in chip stocks, as news that a US trade court blocked most of Trump administration’s proposed tariffs also lifted investor sentiment.
