Nvidia’s stock has experienced significant fluctuations due to challenges in the Chinese market. Nvidia, a leader in graphics processing units (GPUs) for artificial intelligence (AI), has seen its revenue soar with the rise of AI applications globally. However, tensions between the U.S. and China have impacted Nvidia’s sales in China.
Export restrictions on U.S. technology, including Nvidia’s AI chips, have tightened over the years. Initially, Nvidia managed to adapt by engineering chips that met these restrictions, but maintaining revenue in China has become increasingly difficult. According to Nvidia CEO Jensen Huang, sales in China are now ‘about half of what it was before the export control.’
Recent developments have further complicated Nvidia’s position. The Trump administration’s strengthened export restrictions effectively halted Nvidia’s H20 chip exports to China, leading to a $5.5 billion write-off in the first quarter. Additionally, reciprocal tariffs announced by President Trump initiated a trade war, increasing U.S. tariffs on Chinese imports to 145% and China’s tariffs on U.S. imports to 125%.
Adding to Nvidia’s challenges, Huawei, a major Chinese tech manufacturer, announced a new AI chip, the Ascend 920, which aims to rival Nvidia’s H20. Testing on Huawei’s 910D will begin in May, and production of the 910C is expected to ramp up later this year to meet demand from Chinese tech giants such as ByteDance, Alibaba, and Tencent.
If Huawei successfully fills the gap left by Nvidia in the Chinese market, it could result in billions of dollars in lost revenue for Nvidia. Nvidia’s shares closed down 2.05% on April 28 after intraday losses of 4.5%.
— new from TheStreet