New Licensing Requirements
In a recent regulatory filing, Nvidia (NASDAQ: NVDA) disclosed that during the second quarter of the fiscal year 2024, the U.S. government notified the company of additional licensing requirements for a subset of A100 and H100 products. These requirements apply to certain customers and regions, including some countries in the Middle East. However, the filing did not specify which Middle Eastern countries are affected.
Impact on Nvidia's Sales
Nvidia, which had sales of $13.5 billion in the most recent fiscal quarter ending July 30, generates most of its revenue from the United States, China, and Taiwan. About 13.9% of sales came from all other countries combined, and Nvidia does not provide a revenue breakout from the Middle East.
Previous Restrictions on China
This is not the first time Nvidia has faced export restrictions. A year ago, U.S. officials instructed the company to cease exporting the same two computing chips for AI work to China. This move was seen as potentially hindering the ability of Chinese firms to conduct advanced work like image recognition.
Escalation of US-China Tech Tensions
The decision to stop exports to China was also seen as a significant escalation in the U.S. crackdown on China's technological capabilities, amid rising tensions over the fate of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured.
Countries Affected Remain Unspecified
The securities filing, posted on August 28, did not detail which countries are newly restricted from receiving chips.