Nvidia, the financial results of the first quarter of the 2026 financial results announced a remarkable balance sheet damage to the agenda. In the quarter, which ended on April 28, the company recorded a total of $ 4.5 billion expense due to H20 artificial intelligence chips that cannot be sold to China. In addition to this figure, potential income of $ 2.5 billion did not occur due to export barriers. The new undergraduate conditions implemented by the US administration have greatly interrupted Nvidia’s activities in this field.
Although the company stated that it was not caught unprepared for this development in the first place, the amount of damage announced was slightly below the expectations. In his first assessment at the beginning of April, Nvidia reported that he expected a total negative impact of $ 5.5 billion for the first quarter. Although the damage was slightly lower, the main concern appeared in the second quarter forecasts. Nvidia predicts that restrictions on H20 exports will cause $ 8 billion loss in the second quarter.
Nvidia, who cannot access the Chinese artificial intelligence market, hardly recovers the income table
Jensen Huang, CEO of the company, spoke quite clearly when explaining these developments to investors. According to Huang, China continues to be one of the largest artificial intelligence markets in the world. This size is important not only in commercial terms, but also in terms of the direction of technological development. However, due to the new undergraduate obligations of the United States, this Sunday is actually closed for Nvidia as of now.
Huang said that Hopper architecture, which forms the basis of H20 chips, cannot be simplified any more than the current arrangements. Although the company tries to make its product suitable for China, it does not seem possible to technically. For this reason, Nvidia had to completely disable the data center business in China for now. This means not only loss of income, but also long -term market loss.
In addition to all these, the Nvidia administration considers this problem not only as a technical, but also as a political obstacle. The company believes that the fully prevention of artificial intelligence activities in China can weaken the American chip industry in international competition. Huang said that they welcomed the Rule of Artificial Intelligence, which Biden management recently canceled. However, the fact that restrictions from the Trump era are still in force has almost completely eliminated Nvidia’s presence in the Chinese market.
Despite this, Huang stressed that China already has artificial intelligence technologies and that these developments are irreversible. According to him, the main issue is whether the artificial intelligence infrastructure in China will work through American platforms or will turn to alternative systems. Although the US restrictions against Chinese manufacturers seem to protect domestic producers in the short term, they may cause these companies to strengthen in the global market in the long run. At the end of this process, Nvidia is at the risk of losing a serious ground in international competition.
The company’s current strategy aims to grow more aggressive in markets other than China. Especially in India, Southeast Asia and the Middle East, the demand for artificial intelligence chips is increasing. Nvidia aims to compensate for loss of income by developing product architecture for these regions. In addition, the company plans to accelerate artificial intelligence investments in the US domestic market.