Effective immediately, NVIDIA (NVDA) disclosed in its latest quarterly filing that the U.S. Government has imposed a new license requirement for future GPU exports to China, including Hong Kong, of its A100 and forthcoming H100 integrated circuits. NVIDIA said the U.S. indicated that the new license requirement will address the risk that the covered products may be used in, or diverted to, a ‘military end use’ in China.

The H100, NVIDIA’s next generation high-performance computing (HPC) platform, is used in data centers and set to launch later this year. The product helps users perform artificial intelligence work 9x faster than prior generation integrated circuits.

NVIDIA suggests the export ban may result in H100 launch delays and a partial exit from China:

“The new license requirement may impact our ability to complete our development of H100 in a timely manner or support existing customers of A100 and may require us to transition certain operations out of China…”

NVIDIA will seek exemptions or licenses for Chinese customers desiring the new chips.

In the quarter ended July 31, 2022 China, including Hong Kong, accounted for 23.8% of NVIDIA’s $6.7 billion in revenue. The disclosure comes 6-days after NVIDIA’s latest earnings release. The company says the fiscal Q3 guidance provided August 24, 2022 included approximately $400 million in potential sales to China which may be subject to the new license requirement.

Shares sank 6.5% after we first broke the news on Twitter.