The share price of Nvidia fell 6.5% after trading hours on Wednesday after the company said that it had been told by the U.S. government to stop selling chips in China and Russia.
According to the filing to SEC, Nvidia stated that a new license is required for future exports to China, including Hong Kong, in order to reduce the risk that the products could be used by the Chinese military.
The suspension of sales to China includes two top computing chips for artificial intelligence work, which could cripple Chinese firms from technology such as image and speech recognition. Meanwhile, the move also affected Nvidia’s business in China at the same time.
Nvidia said that it expected to lose $400 million in potential sales in China in the third quarter of 2022 that could result in the company not reaching its sales target of $5.9 billion.
While the order extended to Russia, Nvidia stated that there are no customers there.
Nvidia added that it was applying for a license to continue some Chinese exports but was not 100% sure whether the Biden Administration will grant an exemption.