Nvidia follows export laws ‘to the letter’ after China chip sales end

A day after Nvidia revealed it would incur $5.5 billion in costs related to canceled orders for the H20 chip, which the government said this week requires a license to export to China, the company said it abides by rules on where it can sell its artificial intelligence processors.

“The U.S. government instructs American businesses on what they can sell and where — we follow the government’s directions to the letter,” an Nvidia representative said in a statement.

Nvidia said the statement was in response to a House Select Committee focused on national security threats from China, which opened an investigation into Nvidia’s sales on Wednesday. The H20 was introduced by Nvidia after the Biden administration restricted AI chip exports in 2022. It’s a slowed-down version intended to comply with U.S. export controls.

Nvidia’s brief comment is an indication of how the company is going to defend its business in Washington, D.C., as its technology draws increased scrutiny related to national defense and security. The company’s stock price tumbled almost 7% on Wednesday.

Nvidia’s chips have the vast majority of the market for AI applications, and some were used by China’s DeepSeek to build R1, which upended markets in January.

On Wednesday, the chipmaker touted the taxes it paid, its U.S.-based workforce, and its role as a technology leader.

The company’s exports even help the U.S. fix its trade deficit, the statement said, directly addressing President Trump’s stated reason for introducing tariffs earlier this month.

“NVIDIA protects and enhances national security by creating U.S. jobs and infrastructure, promoting U.S. technology leadership, bringing billions of dollars of tax revenue to the U.S. treasury, and alleviating the massive U.S. trade deficit,” according to the statement.

One challenge for Nvidia is that the H20 was legal for export to China until last week, under previous Biden administration rules. But the House Select Committee said on Wednesday the sale of H20 chips for the past year was effectively a “loophole.”

“The technology industry supports America when it exports to well-known companies worldwide – if the government felt otherwise, it would instruct us,” Nvidia said in its statement.

The government is also investigating whether shipments of restricted chips to China went through Singapore, Nvidia’s second-largest market by billing address with just under $24 billion in sales in the company’s past fiscal year, according to filings.

Nvidia clarified on Wednesday that its Singapore revenue indicates sales with a billing address in the country, often for subsidiaries of U.S. customers.

“The associated products are shipped to other locations, including the United States and Taiwan, not to China,” Nvidia said.

In addition to Chinese export controls and the congressional investigation, Nvidia also faces additional restrictions on what it can export starting next month, under “AI diffusion rules” first proposed by the Biden administration.

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