NVIDIA has warned investors of a forthcoming decline in sales following US export controls to China on high-end artificial intelligence (AI) chips. 

The leading chip maker reported a major lift in profits on Tuesday (21 November), reporting sales in the last three months of $18.1bn, an increase of 206% on the same period last year. Profits also increased from $680m for the period last quarter to $9.8bn this quarter. 

The news comes as the Biden administration calls for restrictions on overseas use of the most advanced US-made AI chips.

President Biden said the export of such chips could pose a national security threat to the country by aiding in the development of China’s military. 

In a letter to investors, Nvidia chief financial officer Colette Kress warned that the US export ban to countries including China, Iran and Russia will have a significant impact on the AI chip company’s sales. 

Kress wrote: “Our sales to China and other affected destinations, derived from products that are now subject to licensing requirements, have consistently contributed approximately 20-25pc of data centre revenue over the past few quarters.

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By GlobalData

“We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions,” she added.

The news comes as the value AI deals in the US have failed to reach the peak of 2021, according to GlobalData’s Deal Database.

The deals include venture financing, acquisitions, equity offerings, private equity, debt offerings, partnerships, mergers, and asset transactions.

In 2023 so far, the total value of AI deals totalled $42.9bn, a major increase over 2022, which saw deals total just over $15bn.

In 2021, the total value of US AI deals totalled $54.8bn, more than triple the total of 2020, which totalled $13.8bn.

According to recent GlobalData's AI market share report, the US is the leading country in AI adoption within the technology industry, boasting the highest number of AI-related patents, jobs, and deals.

"China, the UK, Japan and India also maintain significant positions in AI adoption within the technology industry," the company wrote.

The global generative AI market was valued at $1.75bn in 2022 and will grow at a compounded annual growth rate of 79.96% to reach a value of $33.03bn by 2027, according to GlobalData's Generative AI Market Size report.

Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.