Item 8.01 Other Events
On August 26, 2022, the U.S. government, or USG, informed NVIDIA Corporation, or
the Company, that the USG has imposed a new license requirement, effective
immediately, for any future export to China (including Hong Kong) and Russia of
the Company's A100 and forthcoming H100 integrated circuits. DGX or any other
systems which incorporate A100 or H100 integrated circuits and the A100X are
also covered by the new license requirement. The license requirement also
includes any future NVIDIA integrated circuit achieving both peak performance
and chip-to-chip I/O performance equal to or greater than thresholds that are
roughly equivalent to the A100, as well as any system that includes those
circuits. A license is required to export technology to support or develop
covered products. The USG 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' or 'military end user' in China and Russia. The Company does
not sell products to customers in Russia.
The new license requirement may impact the Company's ability to complete its
development of H100 in a timely manner or support existing customers of A100 and
may require the Company to transition certain operations out of China. The
Company is engaged with the USG and is seeking exemptions for the Company's
internal development and support activities.
In addition, the Company is engaging with customers in China and is seeking to
satisfy their planned or future purchases of the Company's Data Center products
with products not subject to the new license requirement. To the extent that a
customer requires products covered by the new license requirement, the Company
may seek a license for the customer but has no assurance that the USG will grant
any exemptions or licenses for any customer, or that the USG will act on them in
a timely manner.
The Company's outlook for its third fiscal quarter provided on August 24, 2022
included approximately $400 million in potential sales to China which may be
subject to the new license requirement if customers do not want to purchase the
Company's alternative product offerings or if the USG does not grant licenses in
a timely manner or denies licenses to significant customers.
Certain statements in this Current Report on Form 8-K including statements
regarding the Company's financial outlook for the third quarter of fiscal 2023;
the Company's engagement with the USG seeking exemptions for the Company's
internal development and support activities; the Company's intent to seek
licenses for sales to customers of products subject to the new license
requirement; and the Company's engagement with customers to satisfy their
planned purchases of the Company's Data Center products with products not
subject to the new license requirement are forward-looking statements that are
subject to risks and uncertainties that could cause results to be materially
different than expectations. Important factors that could cause actual results
to differ materially include: global economic conditions; our reliance on third
parties to manufacture, assemble, package and test our products; the impact of
technological development and competition; development of new products and
technologies or enhancements to our existing product and technologies; market
acceptance of our products or our partners' products; design, manufacturing or
software defects; changes in consumer preferences or demands; changes in
industry standards and interfaces; unexpected loss of performance of our
products or technologies when integrated into systems; as well as other factors
detailed from time to time in the most recent reports NVIDIA files with the
Securities and Exchange Commission, or SEC, including, but not limited to, its
annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports
filed with the SEC are posted on the company's website and are available from
NVIDIA without charge. These forward-looking statements are not guarantees of
future performance and speak only as of the date hereof, and, except as required
by law, NVIDIA disclaims any obligation to update these forward-looking
statements to reflect future events or circumstances.
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