NVIDIA’s grip on China’s AI market is slipping. Just a few years ago, the company controlled 95% of the market. Now, its share has plummeted to around 50%. This downturn coincides with rising tensions between the US and China.
The main issue is the US export restrictions. American authorities are worried that NVIDIA’s advanced AI chips, like the H100 and A100, might end up in hostile countries, threatening national security. The Trump administration has been tightening these restrictions, affecting NVIDIA’s business in China. Although the focus is on the H20 chip, millions of older models have already been sold in the country.
CEO Speaks Out
NVIDIA’s CEO, Jensen Huang, has been vocal about the damage caused by these restrictions. He sees China as a $50 billion opportunity, which is roughly R$300 billion. The company has already reported losses of $5.5 billion and might face a total loss of up to $15 billion if the restrictions persist.
Huawei Takes the Lead
As NVIDIA struggles, Chinese companies are filling the gap. Huawei, in particular, is making rapid progress in AI chip development and landing contracts with major players like Tencent, Baidu, and ByteDance. Their Ascend 910B and 910C chips are highly efficient for inference tasks, and the CloudMatrix 384 solution is competing directly with NVIDIA’s Blackwell architecture.
Despite investing in other regions, like the Middle East and Europe, losing influence in China is a significant blow to NVIDIA. With domestic rivals gaining strength and an increasingly hostile political environment, the company’s future in the world’s largest AI market is uncertain.