Nvidia CEO Jensen Huang acknowledged that the company has “largely conceded” the Chinese artificial intelligence chip market to domestic rival Huawei. This strategic shift comes as stringent U.S. export restrictions continue to profoundly reshape the global AI semiconductor landscape.
Huang’s candid remarks coincided with Nvidia’s announcement of another exceptional financial quarter, reporting revenue that surged 85% year-over-year to $81.62 billion, a significant leap from $44.06 billion in the prior year. The company also signaled its confidence in future growth by unveiling an $80 billion share buyback program and raising its dividend.
Despite the robust financial performance, the Chinese market remains a critical and complex issue for Nvidia.
“The demand in China is quite large,” Huang stated in an interview. “Huawei is very, very strong. They had a record year, they’ll likely, very likely, have an extraordinary year coming up, and their local ecosystem of chip companies are doing quite well, because we’ve evacuated that market.”
He elaborated, “We’ve really largely conceded that market to them.”
These statements underscore the accelerating impact of Washington’s increasingly tight controls on advanced AI chip exports, which have significantly bolstered Beijing’s drive toward semiconductor self-sufficiency.
Historically, the Chinese market represented at least one-fifth of Nvidia’s data center revenue. However, the company has been effectively barred from this crucial market following the U.S. administration’s directive in April requiring Nvidia to obtain a license for exporting chips to China and a select group of other nations.
During his discussion with CNBC, Huang adopted a notably cautious stance regarding the prospects for any near-term reopening of the Chinese market. He indicated that Nvidia had advised investors to “expect nothing” concerning approvals for selling its most advanced chips into the country.
AI Industry’s ‘Five-Layer Cake’
“I don’t have any expectation, which is the reason why we put all of our guidance, all of our numbers, all the expectations that I’ve set with all of our analysts and investors to invest nothing, to expect nothing,” Huang reiterated.
Nonetheless, he suggested that Nvidia remains keen to re-engage with the Chinese market should conditions become more favorable.
“We would be more than delighted to serve the market,” Huang commented. “We have a lot of customers there, we have a lot of partners there, and we’ve been there for 30 years.”
Huang’s presence at a recent U.S. presidential summit in China was a last-minute addition. However, the high-profile visit yielded little clarity on whether Nvidia’s next-generation H200 chips would ultimately be permitted for sale in the country. While some reports indicated that certain Chinese firms, including tech giants like Alibaba, Tencent, ByteDance, and JD.com, had received U.S. Commerce Department approval to purchase H200 chips, broader policy shifts remain uncertain.
A U.S. trade representative later clarified that chip export controls were not a subject of discussion during the recent bilateral talks. This suggests that any substantial easing of restrictions on H200 sales might still be a distant prospect.
Concurrently, Nvidia is aggressively expanding its global supply chain operations in anticipation of what Huang described as a massively growing opportunity tied to the burgeoning AI economy.
“The idea of [a] many times larger company is not out of the question,” Huang predicted, detailing Nvidia’s substantial investments across what he characterized as the AI industry’s “five-layer cake”: encompassing energy, chips, infrastructure, models, and applications.
Huang emphasized that Nvidia’s primary focus for its expanding capital reserves is supporting its suppliers, who are instrumental in meeting the surging demand for its products.
“As we’re growing hundreds of billions of dollars at a time, we have to support our supply chain so that they are able to support our growth,” he concluded.
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