It is also worth noting that the US has pursued more aggressive boundaries and strategies on AI chip exports to China, especially under the Biden and Trump administrations. With these controls, we can also observe that China’s ability to build advanced AI models and apps could lead to national security issues.
On Tuesday, at a conference call, Lisa Su, AMD CEO, also mentioned that the impact from the curbs would affect all the quarters this year. Despite new measures, Su also said that AI is expected to see AI chip revenue from the company’s data center business develop this year by “strong double digits”. She also mentioned “it's certainly a headwind, but one which we think is well contained given everything else that we have going on,”.
AMD also said that it would record an $800 million charge from the expected US tariffs on chip exports to China. This Tuesday, the forecast for gross margin reached 43%, representing an 11% point drop from the gross margin.
However, AMD is not the only company going through this; Nvidia has also warned Wall Street that it will shortly need an export license to China, looking for a $5.5 billion charge from it.
The accounts from China are roughly a quarter of AMD’s total revenue, and the mark they leave also controls export, shaving almost 5% of the Wall Street forecast for revenue of $31.03 billion per LSEG data. Jean Hu, AMD's finance chief executive, mentioned in a conference call following the results that the $1.5 billion revenue hit for 2025 was due to a new round of export controls from April.
Michael Schulman, the chief investment officer from running Point Capital, also said, “The subtext is hard to miss; big hyperscalers would rather accelerate purchase order dates than risk export‑license roulette once the latest China rules bite,".
And that “The flip side is that, once those safety‑stock closets are full, Q3 could feel like the morning after a Red Bull binge ... keep one eye on backlog burn rates and another on Washington’s next tariff tweet,” as mentioned by Reuters.
The optimistic forecast demonstrates that the demand for AMD’s advanced processors remains strong as theoretical power complex AI systems for Microsoft, Meta platforms, and other customers. A revenue equal to $7.4 billion is also expected in the second quarter.
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