Nvidia has yet to recover lost sales in China, even after Washington eased some export restrictions, with the company now warning that domestic Chinese rivals could reshape the global AI landscape over time.
Nvidia CFO Colette M. Kress said on the company’s latest earnings call that while limited shipments of its H200 semiconductor products to China-based customers were approved by the US government, the company has not generated any revenue from them.
“We do not know whether any imports will be allowed into China,” she said, highlighting the continued uncertainty around cross-border chip sales.
China previously accounted for at least one-fifth of Nvidia’s data centre revenue, making it a critical market for the US chip giant.
Export controls and stalled recovery
Earlier US export controls forced Nvidia to design a lower-capability chip, the H20, specifically for the Chinese market. However, fresh rules introduced last April required the company to halt those sales.
In December, US President Donald Trump allowed Nvidia to resume shipments of its more advanced H200 chip to China, provided the US government received a 25 percent cut of sales. Despite that policy shift, sales momentum has not returned.
Reports of heightened security scrutiny in both the US and China have added friction. Nvidia CEO Jensen Huang has lobbied policymakers in Washington, D.C., and travelled to China earlier this year, but the commercial recovery remains elusive.
Rising Chinese competition
Beyond regulatory headwinds, Nvidia also flagged intensifying competition from Chinese AI chipmakers.
Kress warned that Chinese rivals, strengthened by recent IPOs, are making progress and could disrupt the structure of the global AI industry over the long term. She urged US policymakers to encourage developers and businesses worldwide, including in China, to continue building on American technology platforms.
In recent months, a wave of Chinese AI chip companies and large language model developers have gone public in Hong Kong and mainland China. Firms such as MiniMax and Moore Threads have seen strong post-IPO surges, fuelled by expectations that they could serve as alternatives to US-developed AI infrastructure.
Meanwhile, Sam Altman of OpenAI recently described the progress of Chinese technology firms across the AI stack as “remarkable”, noting that in some areas they are close to the global frontier.
Although Chinese AI companies are still seen as slightly behind US peers in cutting-edge capability, their offerings are often significantly cheaper. That pricing gap, combined with geopolitical fragmentation, could gradually reshape competitive dynamics in the AI hardware and software ecosystem.
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