Nvidia (NVDA) shares plummeted nearly 7% on Wednesday as the company announced it would incur a staggering $5.5 billion charge due to new U.S. restrictions on AI chip exports to China.

In a regulatory filing, Nvidia revealed that it will now require an export license to sell its highly sought-after H20 chips in China. This significant move comes in response to concerns that these chips could be utilized by Beijing to develop advanced supercomputers. The announcement caught market analysts off guard, especially since Nvidia had designed the H20 GPUs to comply with existing Biden-era restrictions on advanced chip exports.

Despite a slight recovery from this month’s lows, Nvidia's stock has seen a decline of about 20% since the start of 2023, reflecting ongoing uncertainties regarding Washington's trade policies and the future of big tech AI investments.

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