The $50 Billion Market That’s Haunting NVIDIA
NVIDIA chief executive Jensen Huang is fretting. This is evident in the loss of opportunity to do business in China, one of the world’s leading AI markets with a $50 billion potential. In recent months, Huawei Technologies, NVIDIA’s Chinese counterpart, has gained in NVIDIA’s absence and is building an advanced chip production facility to deliver multiple parts for the AI supply chain. Even though the US chip maker maintains a 90% share of the global GPU market, the potential loss of revenue from the Chinese market, estimated at around $8 billion for the upcoming quarter and roughly a sixth of its Q1 earnings, has rattled the company. US President Donald Trump maintained the export restrictions on chips, amid repeated warnings from industry leaders that it could threaten the country’s AI dominance. Huang called it a major strategic blow to the US and said the restrictions have spurred China’s innovation and scale. “Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America’s position,” Huang said during the company’s earnings call on Wednesday, calling the East Asian country a springboard to global success. “With half of the world’s AI researchers based there, the platform that wins China is positioned to lead globally,” he said. “China’s AI moves on with or without U.S. chips. It has to compute to train and deploy advanced models.” Huang said the country’s assumption that China cannot make AI chips was flawed, and considering China’s enormous manufacturing capabilities, it has proved them wrong now. On April 9, 2025, the US government informed NVIDIA that a license is required to export its H20 products to the Chinese market. As a result of these new requirements, NVIDIA incurred a $4.5 billion charge in the first quarter of fiscal 2026. The company reported $4.6 billion in H20 product sales in the quarter prior to the licensing requirement. NVIDIA CFO Colette Kress said during the earnings call that the company is still evaluating its limited options to supply data centre compute products to China, compliant with the US government’s revised export control rules. She added that in the data centre, the company anticipates the continued ramp of Blackwell to be partially offset by a decline in China revenue. “Our outlook reflects a loss in H20 revenue of approximately $8 billion for the second quarter,” Kress said. According to Taiwanese outlet Digitimes, which cited sources within the supply chain, NVIDIA and AMD are preparing to launch new AI GPUs for the Chinese market to comply with US export restrictions on advanced semiconductor technology. NVIDIA is reportedly set to introduce a scaled-down AI GPU known internally as the “B20”, while AMD plans to offer its new Radeon AI PRO R9700 workstation GPU to meet local AI computing needs. Both companies are expected to begin shipments in China by July. Separately, Reuters recently reported that NVIDIA is developing a lower-cost AI chip based on its Blackwell architecture for the Chinese market. The chip’s projected price range is $6,500 to $8,000, which would place it below the price of its H20 GPU, which currently sells for between $10,000 and $12,000. The Rise of Huawei Notably, according to a Reuters report, Huawei is set to begin mass shipments of its Ascend 910C AI chip to Chinese customers in May. The Ascend 910C is an upgraded GPU that combines two 910B processors into a single package, effectively doubling computing power and memory capacity. Meanwhile, Huawei is preparing to test its new AI chip, the Ascend 910D, in China, while it has also introduced the Ascend 920 AI chip. According to DigiTimes Asia, the chip is slated to enter mass production in the second half of 2025. Industry experts believe the Ascend 920 could be a viable alternative to NVIDIA’s H20 GPUs. Meanwhile, Cambricon Technologies is also gaining prominence in China. In a recent report, Cambricon said it had successfully optimised Qwen3 to run efficiently on its GPUs. This optimisation was driven by demand from AI developers in the Philippines seeking China-made chips. Meanwhile, Trump also warned against using Chinese AI chips, leading to criminal penalties. $44.1 Billion in Revenue Despite Hit Despite the setback in China, NVIDIA reported $44.1 billion in revenue in Q1FY26, up 12% from the previous quarter and 69% from last year. This comes as NVIDIA announces plans to build AI factories in the US and partner with local manufacturers to produce NVIDIA supercomputers domestically. The company introduced Blackwell Ultra and Dynamo to accelerate large-scale AI reasoning. Kress also clarified that while Singapore accounted for nearly 20% of Q1 billed revenue, over 99% of the H100, H200, and Blackwell compute revenue billed to Singapore came from US-based customers. Meanwhile, authorities in Singapore and the US are also investigating allegations that $390 million worth of NVIDIA chip servers sent to Malaysia were fraudulently redirected to China. NVIDIA is also partnering with HUMAIN to establish AI factories in Saudi Arabia and unveiled Stargate UAE, a next-gen AI cluster in Abu Dhabi, with partners including G42, OpenAI, Oracle, SoftBank, and Cisco. Moreover, the company is collaborating with Foxconn and the Taiwan government on an AI factory supercomputer. Beyond Chips Huang framed the issue beyond individual chip models or product lines. “The AI race is not just about chips. It’s about which stack the world runs on. As that stack grows to include 6G and quantum, U.S. global infrastructure leadership is at stake.” He emphasised that “export controls should strengthen US platforms, not drive half of the world’s AI talent to rivals.” Pointing to China’s DeepSeek and Qwen models, Huang said, “DeepSeek-R1, like ChatGPT, introduced reasoning AI that produces better answers the longer it thinks. Reasoning AI enables step-by-step problem solving, planning and tool use, turning models into intelligent agents.” All said and done, Huang maintained that US platforms must remain the preferred platform for open-source AI even if it means collaborating with top developers globally, including in China.” The question remains whether China will have its own AI capabilities and chip dominance or run on the American tech stack.
“China’s AI moves on with or without U.S. chips. It has to compute to train and deploy advanced models.”
NVIDIA chief executive Jensen Huang is fretting. This is evident in the loss of opportunity to do business in China, one of the world’s leading AI markets with a $50 billion opportunity. In recent months, Huawei Technologies, NVIDIA’s Chinese counterpart, has gained in NVIDIA’s absence and is building an advanced chip production facility to deliver multiple parts for the AI supply chain. 
["NVIDIA"]
["Go", "ChatGPT", "OpenAI", "AI", "RPA", "innovation", "Git", "GPT", "AI research", "NVIDIA", "R"]
["AI", "ChatGPT", "OpenAI", "R", "Go", "Git", "GPT", "RPA", "innovation", "AI research"]
Siddharth is a media graduate who loves to explore tech through journalism and putting forward ideas worth pondering about in the era of artificial intelligence.