The US government has potentially charged NVIDIA $5.5 billion for exporting H20 artificial intelligence (AI) chips to China without a license, one of the key markets, the chip maker announced in an exchange filing earlier this week.
Amidst the trade war between the US and China over the supply chain of semiconductors and AI chips, the US export control has tried to restrict components to get ahead in the AI race.
On 9 April, the Trump Administration informed NVIDIA that the company must license its H20-related chip exports to China. “The US government indicated that the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China,” NVIDIA said in its Securities and Exchange Commission filing.
NVIDIA allegedly began modifying the chips after former US President Joe Biden signed the CHIPS and Science Act in August 2022. The act provided $52.7 billion in funding for investments in the country’s semiconductor industry.
However, in October 2022, the US imposed export controls restricting US companies from exporting semiconductor components to China. Subsequently, NVIDIA reportedly modified one of its primary AI chips, the H100, to stay within the government limits.
Since his appointment, US President Trump has pushed to reduce overreliance on foreign electronic components. The government is investigating “vulnerabilities in supply chains, the economic impact of foreign market distortions, and potential trade remedies to ensure a secure and sustainable domestic supply of these essential materials,” the White House said on its website.
Currently, the government is implementing a license requirement to export its AI H20 chips to five other digital nations, including Israel, which will be “in effect for the indefinite future.” This comes after NVIDIA’s announcement on Monday that it plans to produce its first AI supercomputers domestically.
AIM reported that the US government imposed steep tariffs on Chinese imports in early April and later exempted tariffs on smartphones, computers and other electronic parts, including chips.
Commerce Secretary @howardlutnick on tariffs exemptions for certain electronics: "Those products are going to be part of the semiconductor sectoral tariffs, which are coming … We need to have these things made in America." pic.twitter.com/2FvptcBzqe
— Rapid Response 47 (@RapidResponse47) April 13, 2025
“When the President issued his reciprocal tariffs, our government at the time specifically said that chips and semiconductors, critical components of our national security, would be dealt with through a separate Commerce authority known as a 232,” White House deputy chief of staff Stephen Miller said on 13 April. “That was always the plan because those components are so essential to our national security. We need to have a separate process for dealing with how to reshore those essential industries … There are no exemptions.”
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