Beijing/California, Apr 16 (Reporter) With the ongoing US-China trade war, chip manufacturing giant Nvidia is expecting to be hit with a loss of $5.5 billion after Washington clamped down on its export of artificial intelligence chips to Beijing. Nvidia, which has been at the heart of the artificial intelligence (AI) boom, will require licences to export its H20 AI chip to China, which has been one of its most popular, according to BBC. The group said in a regulatory filing late on Tuesday that the H20 chip, which is tailored for the Chinese market to comply with export controls that already prevent the sale of its most powerful chips in China, would now require a special licence to sell to customers there. Nvidia said the US had said the move was necessary to address the risk of H20 chips being used in “a supercomputer in China”. The tech giant said federal officials had advised them the licence requirement "will be in effect for the indefinite future". "The (government) indicated that the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China," Nvidia said in a statement to BBC. The company’s shares have already plunged by 6% in after-hours trading (the buying and selling of stocks outside of the regular market hours, either before opening or after closing) due to the 125% duties on all American goods by China, after the US had increased its tariff duties on Chinese goods to the same amount. Marc Einstein from the Counterpoint Research consultancy said the $5.5bn hit estimated by Nvidia was in line with his estimates. "While this is certainly a lot of money, this is something Nvidia can bear," he said. "But as we have seen in the last few days and weeks, this may largely be a negotiating tactic. I wouldn't be surprised to see some exemptions or changes made to tariff policy in the near future, given this not only impacts Nvidia but the entire US semiconductor ecosystem," Einstein added. Washington’s crackdown on H20 chips is the latest tactic in the US’ long-stretched battle with China over the issue of semiconductors, which have been a key focus on each country’s race for tech-supremacy and advancements in AI. The White House press secretary Karoline Leavitt on Tuesday urged China to cut a new trade deal with the US, saying, “the ball is in China’s court,” The Financial Times reported. The US commerce department confirmed later on Tuesday it was issuing new export licensing requirements for the H20, as well as AMD’s MI308 and equivalent chips. “The commerce department is committed to acting on the president’s directive to safeguard our national and economic security,” a spokesperson said. Despite its reduced performance, the H20 has still seen solid demand in China. But Beijing has taken steps to encourage local tech companies to use homegrown chips from companies such as Huawei, and could freeze out the chip giant’s products with new energy-efficiency rules. Nvidia’s shares are also down by about 16% since the start of the year, as of Tuesday’s close, as anxieties mount about the growing arms race between the US and China around the infrastructure that powers AI. They have also been swept into a broader market rout sparked by the escalating trade war. Bernstein analysts on Tuesday said the H20 accounted for about $12 billion of Nvidia's $17 billion in China revenue. There was a lack of clarity at this stage on whether licences might be granted, or whether it amounted to a full “wipeout” of the product line. The rollout of the tech-giant’s newest AI chips has hit stumbling blocks as successive US administrations have sought ways to control the export of the technology...////...