Computer chip giant Nvidia says it will be hit with $5.5bn (£4.2bn) in costs after the US government tightened export rules to China.The firm, which has been at the heart of the artificial intelligence (AI) boom, will require licences to export its H20 AI chip to China, which has been one of its most popular.The rules come amid an escalating trade war between the US and China, with both countries introducing steep trade tariffs on each other covering various goods.Nvidia shares plunged almost 6% in after-hours trading. Nvidia announced on Tuesday that the US government had told it last week that the H20 chip required a permit to be sold to China, including Hong Kong. The tech giant said federal officials had advised them the licence requirement “will be in effect for the indefinite future”.”The [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.The company declined to comment further when contacted by the BBC.Marc Einstein from the Counterpoint Research consultancy said the $5.5bn hit estimated by Nvidia was in line with his estimates.”While this is certainly a lot of money, this is something Nvidia can bear,” he said.”But as we have seen in the last few days and weeks, this may largely be a negotiating tactic. I wouldn’t be surprised to see some exemptions or changes made to tariff policy in the near future, given this not only impacts Nvidia but the entire US semiconductor ecosystem,” Mr Einstein added.Chips remain a battleground in the US-China race for tech supremacy, and US President Donald Trump now wants to turbocharge a highly complex and delicate manufacturing process that has taken other regions decades to perfect.Nvidia’s AI chips have been a key focus of US export controls. Founded in 1993, i …
