NVIDIA reported a $4.5 billion charge in its Q1 FY2026 results due to newly enforced U.S. export restrictions that have blocked sales of its H20 AI chips to Chinese customers. The company also disclosed that it was unable to ship an additional $2.5 billion in H20-related revenue during the quarter, which ended April 28.
CEO Jensen Huang said during the earnings call that “China is one of the world’s largest AI markets… but the H20 export ban ended our Hopper data center business in China.” He said that the company is now facing an $8 billion impact in Q2 from the same licensing barriers.
While NVIDIA welcomed the rollback of President Biden’s proposed AI Diffusion Rule, Huang was critical of the broader strategy. “The question is not whether China will have AI — it already does,” he said. “The question is whether one of the world’s largest AI markets will run on American platforms.” Despite an expected Q2 revenue of $45 billion, the restrictions mark a significant blow to NVIDIA’s position in global AI markets.
