Considering the incredibly high demand for GPUs, they would have sold them regardless. All those sales do is increase demand and push prices up.

Particularly in the current political moment, saying essentially "we were using high demand in a market we can't legally sell in to increase prices for American customers" is not a good look.

(Yes,obviously, not all of this is Nvidia's doing, and demand at this volume through smuggling/front companies would still affect the legitimate market. But being an active participant in it is not a good look.)