Nvidia CEO: We Have 'Largely Ceded' the Chinese AI Market to Huawei Amid US Export Controls

Nvidia CEO Jensen Huang stated that as U.S. export controls continue to reshape the global artificial intelligence (AI) semiconductor landscape, Nvidia has 'largely' ceded the Chinese AI chip market to Huawei.

Nvidia today once again released an impressive financial report, with quarterly revenue soaring 85% to $81.62 billion from $44.06 billion in the same period last year. The company also announced an additional $80 billion in stock buybacks and a dividend increase.

Despite the strong performance, the Chinese market remains a key focus for all.

In an interview with the American financial media outlet CNBC, Huang said, 'The demand in China is quite large,' adding that 'Huawei is a very, very strong company, had a record-breaking year last year, and is very likely to have an excellent year in the coming year.' He said, 'And because we're out of that market, the domestic chip industry chain in China is now developing quite well.'

He further stated, 'We have largely ceded that market to them.'

Huang's remarks highlight how Washington's strengthened controls on advanced AI chip exports have accelerated China's push for semiconductor independence.

The Chinese market once accounted for at least one-fifth of Nvidia's data center revenue. However, since the U.S. Trump administration informed Nvidia in April of this year that a license would be required to export chips to a few countries, including China, Nvidia has been essentially excluded from the Chinese market.

In the CNBC interview, Huang adopted a cautious stance on the prospects of the Chinese market reopening soon, stating that Nvidia has told investors 'not to have any expectations at this stage' about resuming sales of advanced chips to China.

Huang said, 'I have zero expectations, which is why I base all our financial forecasts, all our numbers, and all our communication with analysts and investors on the premise of 'expect zero, no expectations'.'

Nevertheless, he stated that if the situation improves, Nvidia still hopes to return to the Chinese market.

'We would be very happy to serve that market,' Huang said, while also noting that Nvidia has 'been in China for 30 years' and has many customers and partners there.

Huang was last-minute addition to Trump's entourage for a China summit last week; however, Trump's trip did not clarify whether Nvidia's H200 chips could be sold in China.

Reuters reported last week that some Chinese companies, including Alibaba, Tencent, ByteDance, and JD.com, had received approval from the U.S. Department of Commerce to purchase H200 chips.

However, the U.S. Trade Representative later stated that chip export controls were not discussed in last week's U.S.-China talks, indicating that a significant easing of restrictions remains challenging in the short term.

But with vast growth opportunities presented by the broader AI economy, Nvidia is also actively expanding its supply chain layout.

Huang said, 'it is not impossible for the company to grow several times in the future,' adding that Nvidia is expanding its investment in what he calls the 'five-layer cake' of the AI industry: energy, chips, infrastructure, models, and applications.

He stated that Nvidia's priority is to use its growing cash on hand to support suppliers in coping with surging demand. 'Every time our business scale grows, it's on the order of hundreds of billions of dollars. Under these circumstances, we must help our supply chain members so they can support our growth.'