Nvidia Concedes China AI Chip Market to Huawei

CNBC reported Wednesday that Nvidia CEO Jensen Huang believes his company has effectively surrendered the China AI chip market to domestic rival Huawei. The admission came alongside a record-breaking quarterly earnings report.

Nvidia Posts Record Quarter as China Tensions Linger

Nvidia’s quarterly revenue surged 85% year-over-year to $81.62 billion, up from roughly $44 billion in the same period last year. The company also launched an $80 billion share buyback and lifted its dividend. Despite the headline strength, China remained a central concern for investors and analysts alike.

Huang told CNBC’s Sara Eisen that Chinese demand for advanced AI chips is substantial. He said Huawei had a record year and appears positioned for another strong one. Local Chinese chip developers are also gaining ground, Huang noted, precisely because Nvidia has stepped back from the market.

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How U.S. Export Controls Reshaped the Market

China was once a cornerstone of Nvidia’s data center business, historically accounting for more than a fifth of that segment’s revenue. The picture changed dramatically after the Trump administration required Nvidia to obtain export licenses before selling advanced chips to China and select other countries earlier this year.

Washington’s restrictions have had a compounding effect. Beijing accelerated its push for semiconductor self-sufficiency, and Huawei stepped in to fill the vacuum Nvidia left behind. Huang said Nvidia has effectively told investors and analysts to “expect nothing” from the Chinese approval process.

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Background: A 30-Year Relationship Under Pressure

Nvidia has operated in China for three decades. Huang attended President Donald Trump’s Beijing summit last week as a late addition, but the meeting produced no clarity on whether Nvidia’s H200 chips would receive clearance for sale there. A U.S. trade representative confirmed that chip export controls were not part of those discussions. Reuters separately reported that a handful of Chinese firms, including Alibaba and ByteDance, had received Commerce Department approvals for H200 purchases, though broader access remains uncertain.

Nvidia Eyes a Much Larger Future Beyond China

Huang framed Nvidia’s longer-term ambitions around what he called the AI industry’s “five-layer cake,” spanning energy, chips, infrastructure, models, and applications. He suggested the company could grow several times its current size. His immediate priority for deploying Nvidia’s cash pile, he said, is reinforcing its supply chain to sustain that expansion.

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