AMD Anticipates $800M Charge Due to U.S. License Requirement for AI Chips

AMD Faces Potential $800 Million Impact from U.S. Export Controls on AI Chips

Advanced Micro Devices (AMD) has warned that the U.S. government's new licensing requirements for exporting AI chips to China and several other countries could significantly affect its financial performance. In a recent SEC filing, AMD disclosed that failing to secure the necessary export licenses could leave the company facing up to $800 million in charges related to inventory, purchase commitments, and reserves. The filing specifically mentions that these new regulations target AMD’s MI308 GPUs.

“On April 15, 2025, [AMD] completed its initial assessment of a new license requirement implemented by the [U.S.] government for the export of certain semiconductor products to China (including Hong Kong and Macau) and D:5 countries,” the company stated. “The [export control] applies to [AMD’s] MI308 products. The company expects to apply for licenses but there is no assurance that licenses will be granted.”

The news led to a noticeable dip in AMD's stock, with shares falling approximately 6% during early trading on Wednesday.

Broader Impact on the Semiconductor Industry

AMD is not the only company feeling the squeeze from these tightened export controls. Its major competitor, Nvidia, also reported potential impacts. In a separate filing, Nvidia revealed it is bracing for charges amounting to $5.5 billion due to these export restrictions for the first quarter ending April 27.

The push for stricter export controls on U.S.-manufactured GPUs, especially those used in AI applications, has been gaining momentum among government officials. They argue that allowing Chinese companies, particularly those in the AI sector, access to these advanced chips could undermine U.S. leadership in AI technology and pose risks to national security.

A spokesperson from the U.S. Commerce Department emphasized the importance of these measures, stating to Reuters, “The license requirement is in service of the President’s directive to safeguard our national and economic security.”

This situation underscores the growing tension between technological advancement and national security concerns, with significant financial implications for leading chip manufacturers like AMD and Nvidia.