Nvidia reported profits that exceeded market expectations. The $4.5 billion loss from US export restrictions was less than the Silicon Valley giant had feared.

Nvidia announced that it had made a profit of $18.8 billion on revenues of $44.1 billion, which led to a nearly 4% rise in shares in after-hours trading, AFP reported.

In April, Nvidia notified regulators that it expected a $5.5 billion loss for the quarter due to a new US licensing requirement for the main chip it can legally sell in China.

US authorities have told Nvidia that it must obtain licenses to export H20 chips to China due to concerns that they could be used in supercomputers there. This was announced by the Silicon Valley company in a document filed with the Securities and Exchange Commission.

The new licensing rule applies to Nvidia graphics processors with a bandwidth similar to that of the H20.

The US had already restricted exports to China of Nvidia's most sophisticated graphics processors, designed to power the latest artificial intelligence (AI) models.

Nvidia has been informed that the licensing requirement for H20 chips will apply for an indefinite period, the document states.

The new requirements resulted in a $4.5 billion charge for Nvidia for the quarter related to excess H20 inventory and purchase obligations "as demand for H20 declined," the chipmaker said in its earnings report.

According to the company, US export restrictions prevented Nvidia from generating an additional $2.5 billion in H20 revenue for the quarter.

Nvidia CEO Jensen Huang said demand for the company's AI-powered technology remains strong and that a new Blackwell NVL72 AI supercomputer, dubbed a "thinking machine," is in full-scale production.

"Countries around the world are recognizing AI as a core infrastructure—just like electricity and the internet—and NVIDIA is at the center of this profound transformation," Huang said. | BGNES