Foxconn plans huge Taiwan AI data center with Nvidia
Taiwan’s Foxconn, the world’s largest contract electronics maker, said on May 20 that an artificial intelligence center it announced with Nvidia will be built in phases and is targeted to have 100 megawatts of power.
Nvidia announced that it took in $44.06 billion as its data center business grew 73% year-over-year when it released its first quarter earnings May 28.
The company recorded the revenue increase despite a $4.5 billion charge associated with excess inventory and purchase obligations after export restrictions were placed on the H20 chip designed for the Chinese market by the Trump administration.
Nvidia CEO Jensen Huang said on the company’s investor call that “the H20 export ban ended our Hopper data center business in China” and that the $50 billion AI chip market in China is “effectively closed to U.S. industry.”
The company had expected to incur a $5.5 billion dollar charge – according to Reuters – but Nvidia said in CFO commentary that it was able to mitigate some of the impact by reusing materials. The chip giant reported that it lost $2.5 billion of H20 revenue in the quarter.
Nvidia stock rose in after-hours trading Wednesday, bouncing between a 4% and 5% gain after the bell.
Nvidia earnings hit by export charge
The company said that its gross margin was 61% for the quarter but would have been 71.3% if not for the export restrictions.
The same dynamic was reported for earnings as Nvidia posted an earnings per share of 81 cents that would have been 96 cents if not for the incurred charge.
The company said it expects revenue for the current quarter to be around $45 billion, and anticipates an $8 billion loss in H20-related revenue due to the export restrictions.
Huang, founder and CEO of Nvidia, pointed to the strength of the company’s artificial intelligence business in a press release accompanying the release – despite political tensions.
“Countries around the world are recognizing AI as essential infrastructure – just like electricity and the internet,” Huang wrote.
