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Shares of Nvidia fall after the US government restricted the sale of chips to China

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Nvidia headquarters in Santa Clara, California on Tuesday, February 23, 2021.

David Paul Morris | Bloomberg | Getty Images

Nvidia shares fell 4% in extended trading Wednesday after the company said the U.S. government was restricting sales in China.

U filing with the SECNvidia said on August 26 that the US government notified the company of new license requirements for future exports to China, including Hong Kong, to reduce the risk of the products being used by the Chinese military.

Nvidia said the restriction would affect the A100 and H100 products, which are GPUs sold to businesses.

“The license requirements also include any future Nvidia integrated circuit that achieves peak performance and chip-to-chip I/O performance at or above thresholds roughly equivalent to the A100, and any system incorporating these circuits,” the filing said.

The company expects to lose $400 million in potential sales in China in the current quarter after previously forecasting revenue of 5.9 billion dollars. The new rule also applies to sales to Russia, but Nvidia said it has no paying customers.

In recent yearsThe US government has imposed increasing restrictions on the export of chips made with American technology, out of concern that Chinese companies could use them for military purposes or steal trade secrets.

Nvidia said it had applied for a license to continue some Chinese exports, but did not know if the US government would grant an exemption.

“We are working with our customers in China to accommodate their planned or future purchases with alternative products and may seek licenses if replacements are insufficient,” an Nvidia spokesperson told CNBC. “The only current products subject to the new licensing requirements are the A100, H100 and systems such as the DGX that incorporate them.”

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