Trump trade policy to cost Nvidia $10.5B in lost revenues • The Register
US export controls blocking the sale of Nvidia’s H20 GPUs to will cost the company $10.5 billion in lost revenues in the first half of the 2026 fiscal year, executives revealed on Wednesday’s Q1 earnings call.
The export rules, which went into effect in April, effectively cut Nvidia off from the Chinese datacenter market, but not before it managed to deliver roughly $4.6 billion of planned $7.1 billion worth of H20 shipments expected for Q1.
According to CFO Colette Kress, Nvidia missed out on $2.5 billion in H20 sales in Q1, and will shave another $8 billion off its Q2 revenues.
China’s AI moves on with or without US chips
On top of the revenues lost to the US-China trade war, Nvidia also booked a $4.5 billion charge in Q1 related to H20 inventory and purchase commitments that it can no longer realize. The situation could have been worse, Kress noted. Nvidia initially expected to write off $5.5 billion, but ended up being able to salvage about $1 billion.
Speaking on Wednesday’s call, CEO Jensen Huang praised the US president Donald Trump for investing in US manufacturing and the decision to scrap the Biden administration’s AI diffusion rules, which would have cost Nvidia even more by capping exports of AI chips to most of the world.
However, on China, Huang rehashed many of his talking points from his Computex Q&A last week, warning that US trade policy could backfire.
“China’s AI moves on with or without US chips. It has the compute to train and deploy advanced models. 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,” Huang said. “Shielding Chinese chip makers from US competition only strengthens them abroad and weakens America’s position.”
With that said, Nvidia clearly hasn’t given up on the Chinese market. “We are exploring limited ways to compete, but Hopper is no longer an option,” Huang said of the H20 accelerator.
And while he declined to offer specifics of future chips for the Chinese market, the company is reportedly preparing a cut down version of its RTX Pro 6000 cards for buyers in the Middle Kingdom.
In spite of the geoeconomic headwinds, Nvidia’s Q1 delivered $18.8 billion in profits on revenues that surged 69 percent YoY and 12 percent from last quarter to $44.1 billion.
Hyperscalers are each deploying 72,000 Blackwell GPUs per week
Unsurprisingly, the lion’s share of those revenues came from Nvidia’s datacenter division, which pulled in $39.1 billion for the quarter, an increase of 73 percent YoY and 10 percent over the prior quarter.
“Blackwell contributed nearly 70% of data center compute revenue in the quarter, with a transition from Hopper nearly complete,” Kress said. “On average, major hyperscalers are each deploying nearly 1,000 NVL72 racks, or 72,000 Blackwell GPUs, per week and are on track to further ramp output this quarter.”
Nvidia’s other segments also saw solid growth during the first quarter. Gaming revenues topped $3.8 billion, up 42 percent YoY, on the launch of lower-end 50-series graphics hardware. Professional visualization hit $509 million, up 19 percent during the quarter, while Nvidia’s automotive and robotics division grew 72 percent YoY to $567 million.
Looking ahead to Q2, Nvidia had hoped to pull in revenues of $53 billion, but thanks to changes in US trade policy, the chip biz is now forecasting sales of $45 billion give or take a percent or two. You can pore over the full earnings release here should you be so inclined.
Despite the China troubles, the market sent Nvidia stock up nearly five percent after hours, as investors perhaps realized the hit wouldn’t be as bad as feared. ®
