Nvidia warns Trump's demand for 15% H20 revenue cut risks litigation
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More news: More news: Nvidia said it has not shipped any H20 chips under newly granted US licences and excluded them from its Q3 outlook, but added that if geopolitical issues ease it could generate US$2 to US$5 billion in H20 revenue in the quarter.
The company’s filings also said US officials had expressed an expectation that the government will receive 15% of revenue from licensed H20 chip sales to China, but said no regulation has been published to codify the requirement. Such a demand, however, could raise costs, “may subject us to litigation” and strengthen competitors not subject to similar rules, it said.
What they said: “While a select number of our China based customers have received licenses over the past few weeks, we have not shipped any H20 based on those licenses,” Nvidia CFO Colette Kress told analysts in a call.
“We have not included H20 in our Q3 outlook as we continue to work through geopolitical issues. If geopolitical issues reside, we should ship US$2 to US$5 billion in H20 revenue in Q3. And if we had more orders, we can bill more,” she added.
“We continue to advocate for the USG to approve Blackwell for China. Our products are designed and sold for beneficial commercial use, and every license sale we make will benefit the US economy, the US leadership. In highly competitive markets, we want to win the support of every developer. America's AI technology stack can be the world's standard if we race and compete globally,” Kress said.
As part of Nvidia’s filing Nvidia said that “in August 2025, the USG granted licenses that would allow us to ship certain H20 products to certain China-based customers, but to date, we have not generated any revenue or shipped any H20 products under those licenses.”
The statement added: “USG officials have expressed an expectation that the USG will receive 15% of the revenue generated from licensed H20 sales, but to date, the USG has not published a regulation codifying such requirement. Any request for a percentage of the revenue by the USG may subject us to litigation, increase our costs, and harm our competitive position and benefit competitors that are not subject to such arrangements.”
The context: Nvidia’s China sales have been unsettled since the Biden administration restricted exports of advanced AI chips in 2022.
The situation was further complicated this year when President Trump halted chip sales to China in April, then reversed the order in August 2025 on the condition that the US government receive 15% cut of those revenues.
Beijing has meanwhile urged local firms not to use Nvidia’s H20 processors, deepening uncertainty and contributing to a US$15 billion gap between the highest and lowest Wall Street estimates for Nvidia’s upcoming quarterly revenue.
Nvidia modestly beats expectations, launches US$60b buyback, shares fall
The news: Nvidia posted better-than-expected quarterly results, with adjusted earnings per share of USD1.05 and revenue of USD46.743 billion, both modestly above the consensus average from IBES.
The numbers: The world’s largest chipmaker also announced an additional USD60 billion share buyback. Gross margin reached 72.4%, but shares fell over 4% in after-hours trading.
Its Q3 revenue forecast was USD54 billion, slightly above consensus but below some high-end estimates. There were no H20 chip sales to China in Q2 and none are included in the outlook, following Beijing’s reported push for firms to avoid the chips.
Data centre revenue slightly missed forecasts.
The context: Nvidia is navigating ongoing US-China export restrictions and market uncertainty. Despite that, demand for its Blackwell architecture remains strong.
The sources: Nvidia release, The Wall Street Journal, Bloomberg, Reuters, Nvidia's 10Q filing
