Nvidia reported a strong first quarter despite a $2.5 billion revenue loss tied to halted shipments of its H20 AI chips to China, the result of new export restrictions enforced by the Trump administration last month.
The company absorbed a $4.5 billion charge from excess inventory and unfulfilled obligations tied to the H20 chip but had previously warned investors the impact could reach $5.5 billion. Still, the hit was smaller than feared, sending Nvidia shares up 3.5% in after-hours trading.
Investors have closely monitored the fallout from U.S. trade policy as Nvidia becomes increasingly central to global AI infrastructure. China accounted for about 13% of Nvidia’s sales last year. In April, the White House told the company it would need a special license to ship the H20 chip to China — a move CEO Jensen Huang called a “failure” that weakens U.S. influence while strengthening foreign competition.
“China’s AI moves on with or without us,” Huang said during a call with analysts. “The question is whether one of the world’s largest AI markets will run on American platforms.”
Despite those concerns, Nvidia reported $44.1 billion in revenue, a 69% year-over-year increase, and net income of $18.8 billion, up 26%. The results exceeded Wall Street expectations.
Nvidia credited booming demand for AI infrastructure — fueled by major players like OpenAI, Microsoft, and Google — and rising government investment in sovereign AI projects. A key example: the recently announced 5-gigawatt data center in Abu Dhabi, unveiled during President Trump’s visit to the UAE, with Huang also in attendance.
The company is also backing Trump’s call for increased domestic manufacturing. It recently revealed plans to partner with firms in Texas to produce AI chips and supercomputers.
While Nvidia expects to lose another $8 billion in potential revenue next quarter due to the same export restrictions, analysts praised the company’s resilience. “Even amid industry consolidation and geopolitical tension, Nvidia is showing remarkable agility,” said Thomas Monteiro, senior analyst at Investing.com.
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