AMD takes $800M haircut as US gov't cuts off China's AI GPU supply

The U.S. recently issued fresh restrictions on AI chip exports to China and other countries, further reducing the maximum allowable performance that manufacturers like Nvidia and AMD can deliver to their customers in the affected regions. Because of this, AMD reported in an SEC filing that it might suffer “charges of up to approximately $800 million in inventory, purchase commitments, and related reserves.”

The U.S. government has been taking steps to limit Beijing’s access to America’s most advanced chips to ensure the U.S. will retain its edge in artificial intelligence and prevent its East Asian rival from outpacing it. Because of this, both AMD and Nvidia have created AI GPUs specifically designed to meet the federal government’s restrictions. However, the White House updated its limitations recently, making the Nvidia H20 and AMD MI308 ineligible for export without a license.

“On April 15, 2025, Advanced Micro Devices, Inc. (the “Company”) completed its initial assessment of a new license requirement implemented by the United States government for the export of certain semiconductor products to China (including Hong Kong and Macau) and D:5 countries…,” the company said in its SEC filing. “The Export Control applies to the Company’s MI308 products. The Company expects to apply for licenses but there is no assurance that licenses will be granted.”

AMD isn’t the only one taking a substantial cut thanks to expanded export controls. Nvidia has also been hit massively, with the company expecting to make a $5.5 billion write-off with its H20 GPUs. The U.S. Department of Commerce said (via Reuters) that it’s enacting these requirements to act on “the President’s directive to safeguard our national and economic security.”

This new restriction will make it harder for Chinese companies to acquire the chips they need to train their AI models. Nevertheless, it’s been proven that these bans and sanctions have largely been ineffective. We’ve already seen some examples of Chinese businessmen importing sanctioned Nvidia H200 GPUs, and it’s widely reported that you can get these advanced chips into China by using an intermediary located in nearby countries such as Malaysia, Vietnam, and Taiwan. Singapore and Malaysia are making moves to reduce the leakage of AI chips into China, but we won’t know how effective their moves will be in interdicting the massive black market demand.