Nvidia has walked away from China's artificial intelligence chip market, and Huawei has moved in to fill the space. That was the blunt assessment from Nvidia CEO Jensen Huang this week, as the company reported another record quarter even as its largest potential growth market remained off-limits.
According to a report by CNBC, Huang made the comments during an interview following Nvidia's latest earnings release, which showed revenue surging 85% to $81.62 billion from $44.06 billion a year earlier. The company also announced an $80 billion share buyback program and raised its dividend. But China cast a shadow over the results.
"The demand in China is quite large," Huang told CNBC's Sara Eisen. "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."
"We've really largely conceded that market to them," he added.
China once accounted for at least one-fifth of Nvidia's data center revenue. That changed after the Trump administration told Nvidia in April that it would need a license to export chips to China and a handful of other countries. Nvidia has since told analysts and investors to expect nothing from that market.
"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 said.
Huang was added at the last minute to President Donald Trump's China summit last week, though the meeting produced no clarity on whether Nvidia's H200 chips would be permitted for sale in the country. Reuters reported that some Chinese companies, including Alibaba, Tencent, ByteDance, and JD.com, had received approval from the U.S. Commerce Department to purchase H200 chips. However, a U.S. trade representative said chip export controls were not part of discussions during the China talks, suggesting any significant easing of restrictions could still be far off.
Despite the lost market, Huang said Nvidia had not given up hope of returning. "We would be more than delighted to serve the market," he said. "We have a lot of customers there, we have a lot of partners there, and we've been there for 30 years."
Washington's restrictions have had a clear secondary effect: pushing Beijing to accelerate its own semiconductor development. Huawei, once a customer of Western chip technology, now competes directly with Nvidia for AI chip sales inside China, and its local ecosystem of suppliers has grown stronger in the process.
Huang described Nvidia's longer-term ambitions in sweeping terms, pointing to what he called the AI industry's "five-layer cake" spanning energy, chips, and infrastructure. He suggested the company's potential scale was still far from its ceiling. "The idea of [a] many times larger company is not out of the question," he said.
