Nvidia Navigates US-China Tensions with Potential New AI Chip for Chinese Market

Nvidia reportedly shows China-specific B30 chips with 80% of the performance of the standard Blackwell GPU to the U.S. government -- Nvidia CEO says approval is still up in the air

Will the U.S. finally allow Nvidia to export its follow-up to the hit H20 chip? Reports suggest that Nvidia has already presented a B30 chip to the U.S. government for export approval to China. According to the Wall Street Journal, these talks began earlier this year, with the chip's peak performance reaching only 80% of the standard Blackwell GPU's performance. President Donald Trump has commented that he will allow Nvidia to ship a Blackwell if it's at least 30% less performant than the company's top offering. "It is possible I would make a deal [on a] 'somewhat enhanced in a negative way' Blackwell processor," Trump said to reporters. "In other words, take 30% to 50% off of it." By comparison, the Nvidia HGX H20 is only around 50% of the performance of the full-fat H100, especially in multi-GPU setups. The U.S. banned the sale of H20 in mid-April, resulting in a $5.5 billion write-off for Nvidia. However, it reversed this decision some three months later by issuing export licenses, allowing the company to resume sales in China in exchange for 15% of its sales in the country. U.S. Commerce Secretary Howard Lutnick stated that this was part of the negotiations for China to loosen its grip on rare-earth minerals -- a crucial resource required to produce semiconductors, high-tech equipment, and defense technologies. However, this was soon followed by warnings from Chinese state media saying that the H20 is unsafe and outdated, and the authorities have reportedly discouraged organizations, especially government bodies, from using it. All of this supposedly came from Sec. Lutnick's abrasive 'addiction' comments, which the Chinese leadership called insulting. However, some experts say that Nvidia and its AI chips are being used as a political maneuvering tool by both sides, primarily as China and the U.S. are engaged in a trade war. "If the U.S. government were to approve a powerful Blackwell for China, even at a 30-to-50% performance reduction," said Jimmy Goodrich, a senior adviser to RAND Corporation, a think tank with offices in Washington, D.C. "My guess is we'd miraculously see China forget about security concerns." This is probably why we've seen claims that Nvidia is asking its suppliers to wind down H20 production. The company did not confirm this, though, only telling Tom's Hardware that it constantly manages its supply chain to match market conditions. Still, the AI giant is working to prepare a next-generation offering for H2O. Nvidia CEO Jensen Huang has told reporters that the company is in talks with the United States government for this, but that the negotiations are still in the early stages. We are yet to see if the White House will approve the sales of the B30 chip in its current iteration to China. Nvidia likely needs this to move forward to retain its leadership in the East Asian country, especially as Beijing appears to be successful in encouraging Chinese companies to reduce their reliance on H2O.

Nvidia results to spotlight fallout of China-US trade war

Aug 26 (Reuters) - Nvidia's (NVDA.O), opens new tab business in China will be the focus of investors when the AI chipmaker reports earnings on Wednesday, following an unusual deal with the Trump administration and Beijing's subsequent efforts to stall imports. Caught in the crossfire of Washington and Beijing's ongoing trade war, the fate of Nvidia's China business hangs on where the world's two largest economies land on tariff talks and chip trade curbs. The artificial intelligence chip pioneer recently agreed to pay the U.S. federal government 15% of the sales it made it China in exchange for export licenses, a move that has drawn bipartisan criticism. Beijing - despite huge appetite for Nvidia's chips in China - has urged domestic companies to limit purchases over apparent security concerns. Reports have emerged that Nvidia has told some suppliers to suspend production of its China-special H20 chips. But Reuters has reported that Nvidia is developing a new and more powerful chip for China. "We've got to get clarity on these two governments first, whether China wants the chips and whether the administration is going to allow it," said Jamie Meyers, senior analyst at Nvidia shareholder Laffer Tengler Investments. "And if so, how is that going to work?" Last year, China accounted for 13% of Nvidia's revenue. For the second quarter ended July 2025, many analysts did not factor in any revenue from H20 sales in that country given the US approval came late in the quarter, while China's pushback complicates forecast calculations for the year. In May, Nvidia had said the curbs would shave off $8 billion in sales from the July quarter. The curbs led to a $4.5 billion charge in the previous three-month period. Overall, the company is expected to report that second-quarter revenue jumped 53.2% to $46.02 billion, according to LSEG data, a far cry from the triple-digit growth it witnessed for many quarters. But analysts said the overall AI chip business is booming, with strong demand pouring in from tech giants such as Meta (META.O), opens new tab and Microsoft (MSFT.O), opens new tab, who have expanded their capital budgets. Still, positive commentary on demand from CEO Jensen Huang could boost AI stocks that have sold off recently on worries that investors may be valuing them too highly. Nvidia shares have gained more than a third so far in 2025, a smaller gain for the period than the previous two years. This still outpaces a more than 15% gain in the broader chip index (.SOX), opens new tab and the benchmark S&P 500 Index's (.SPX), opens new tab near 10% year-to-date rise. For the third quarter, analysts expect Nvidia to guide to revenue of $52.96 billion, up 51% year-on-year. About $6 billion of that could come from China, analysts from Piper Sandler had estimated with further growth at a 12%-15% rate. But Nvidia could take a 5 to 15 percentage point hit to gross margins on China-bound chips due to the federal deal, with Bernstein analysts estimating it cutting about one point from Nvidia's overall margins. The company's adjusted gross margin is expected to drop nearly 4 percentage points to 72.1% in the second quarter. In the October quarter, gross margin is expected to contract by nearly two points to 73.2%. Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sayantani Ghosh and Aditya Soni Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia CEO in Taipei to visit TSMC, says in talks with US over new China chip

TAIPEI, Aug 22 (Reuters) - Nvidia (NVDA.O), opens new tab CEO Jensen Huang arrived in Taipei on Friday to visit chip foundry partner TSMC (2330.TW), opens new tab, as the biggest U.S. company navigates rising friction between Washington and Beijing over access to its industry-leading AI chips. "My main purpose coming here is to visit TSMC," he told reporters, adding that he would only stay a few hours and leave after dinner with TSMC leaders, according to a live feed broadcast by local media at Taipei's Songshan airport, where he landed in a private jet. TSMC did not immediately respond to a request for comment. U.S. President Donald Trump earlier this month opened the door to the possibility of more advanced Nvidia chips beyond the H20 being sold in China. Reuters earlier this week reported that Nvidia was working on a new chip tentatively named the B30A based on its latest Blackwell architecture that will be more powerful than the H20 model. Asked about the B30A, Huang said Nvidia was in talks with the U.S. over offering China a successor to its H20 chip, but that it was not their decision to make. "It's up to, of course, the U.S. government, and we are in dialogue with them, but it is too soon to know." he said. Complicating Nvidia's effort to retain market share in China has been allegations by Chinese state media that the U.S. company's chips could pose security risks. Authorities last week summoned Chinese tech firms about purchasing the H20, raising concerns about potential information security risks. Huang said that shipping the H20 to China was not a national security concern and that the ability to ship the H20 chips to China was "very much appreciated". Trade publication The Information reported on Thursday that Nvidia (NVDA.O), opens new tab instructed Arizona-based Amkor Technology (AMKR.O), opens new tab to stop production of its H20 chips this week and also notified South Korea's Samsung Electronics (005930.KS), opens new tab, citing two people with direct knowledge of the communications. Amkor handles advanced packaging for the chip, while Samsung Electronics supplies high-bandwidth memory chips for the model. Neither company immediately responded to a Reuters request for comment. "We constantly manage our supply chain to address market conditions," Nvidia spokesperson said in a statement, adding, "As both governments recognise, the H20 is not a military product or for government infrastructure." "China won't rely on American chips for government operations, just like the U.S. government would not rely on chips from China. However, allowing U.S. chips for beneficial commercial business use is good for everyone," it said. Earlier this month, the Trump administration reached a deal with Nvidia and AMD (AMD.O), opens new tab under which the U.S. government would receive 15% of revenue from sales of some advanced chips in China. Reporting by Ben Blanchard and Wen-Yee Lee; Additional reporting by Yazhini MV, Rhea Rose Abraham and Mrinmay Dey in Bengaluru; Writing by Brenda Goh; Editing by Jacqueline Wong and Sonali Paul Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Ben Blanchard Thomson Reuters Ben joined Reuters as a company news reporter in Shanghai in 2003 before moving to Beijing in 2005 to cover Chinese politics and diplomacy. In 2019 Ben was appointed the Taiwan bureau chief covering everything from elections and entertainment to semiconductors.

Reactions to Nvidia's mixed outlook, China uncertainty

Aug 28 (Reuters) - Nvidia investors accustomed to blowout forecasts were left divided after the AI chip giant excluded some China sales from its current-quarter guidance in the face of a trade war between Washington and Beijing. The company's shares (NVDA.O), opens new tab fell about 2% in premarket trading on Thursday, even as CEO Jensen Huang dismissed concerns about the AI spending boom sputtering. Some analysts also pondered whether Nvidia's key data-center results hinted at demand weakness from cloud providers. The absence of sales of its H20 chips to China - one of the biggest semiconductor markets in the world - despite the company striking an unprecedented deal with the Trump administration, left Wall Street parsing the fine print for clues on future momentum. Here are some key quotes: PAUL MEEKS, MANAGING DIRECTOR, FREEDOM CAPITAL MARKETS: "I'm pleased with Nvidia's quarterly results and guidance, particularly the $54 billion revenue forecast for next quarter, which excludes H20 shipments to China." "The stock likely ran too far too fast into the print..... I expect Nvidia will be allowed to ship a 'dumbed down' version of its latest chips as part of Trump's likely tariff and trade deal with China. I'd buy these shares if and when they settle." JAY GOLDBERG, SENIOR ANALYST, SEAPORT RESEARCH PARTNERS: "Blackwell (chip's) ramp was strong, but not as strong as investors had hoped. Data Center revenue grew low single digits sequentially -- the lowest quarter-on-quarter growth rate in a long time." "These results are good for a normal company in normal times, but Nvidia is neither. The lack of China revenue and uncertainty around future shipments is a concern. The longer this takes, the more entrenched domestic PRC alternatives become." GIL LURIA, ANALYST, D.A. DAVIDSON: "Nvidia's disappointing guidance appears to be entirely due to excluding potential China sales, which were included in some estimates. It's unclear when restrictions will lift and sales can resume." BOB O'DONNELL, PRESIDENT AND CHIEF ANALYST, TECHNALYSIS RESEARCH: "Nvidia's top-line beat isn't a surprise, but the slight miss on data center revenue may point to a slowdown in AI infrastructure build-out. Still, the strong forecast and share buyback show confidence in near-term business." RICHARD CLODE, PORTFOLIO MANAGER AT JANUS HENDERSON INVESTORS: "We've got to such big numbers now, even if you think about $3 trillion to $4 trillion through the end of the decade, you're basically ending up at a trillion annualized running rate. At this cadence, we're going to get there fairly quickly." "So there is still this debate on durability of growth, the cyclicality of Nvidia. It's not going to be one way to the right as we think about to the end of the decade." DAN COATSWORTH, INVESTMENT ANALYST AT AJ BELL: "AI demand is not the problem for Nvidia, it's more how politics has got in the way of its grand ambitions for global domination." "The chip giant has not included any H20 sales to China in its forward earnings guidance, leaving investors shocked and the share price down in premarket trading. Also contributing to share price weakness was investor disappointment around data center figures." BEN BARRINGER, GLOBAL TMT ANALYST AT QUILTER CHEVIOT: "It's a solid set of numbers, it's not a massive beat. So it provides a little bit of reassurance, but it's not a complete underwriting of the growth." "If we start to see big contributions from sovereign and from enterprise, then maybe that $4 trillion starts to become more realistic or more into the model. But at the moment, I think it's quite a long-term forecast that I don't put huge weight on at the moment, to be proven." Reporting by Rashika Singh, Arsheeya Bajwa and Akash Sriram in Bengaluru; Editing by Devika Syamnath Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia in talks with U.S. to sell a more advanced chip to China, Jensen Huang says

Nvidia CEO Jensen Huang speaks to the media at a hotel in Beijing, China July 16, 2025. Nvidia is in talks with the U.S. government about shipping a new, more advanced chip to China, CEO Jensen Huang said on Friday. Earlier this week, Reuters reported the U.S. tech giant is developing a new artificial intelligence chip for China, dubbed the B30A, that will be more powerful than the H20 -- the only semiconductor Nvidia is allowed to sell in the country at present. The U.S. has grown concerned in the past few years that advanced American chips could be used in Chinese military applications. A journalist asked Huang about the B30A during a trip to Taiwan. "Offering a new product to China for the data center, AI data centers, the follow on to H20, that's not our decision to make. It's up to of course the United States government. And we are in dialogue with them. But it's too soon to know," Huang said in response. Last month, Huang said he hopes that Nvidia can sell more advanced chips in China than the H20 during a visit to the country. Nvidia's position in China has become a headache for Huang. The company created a special, less-advanced chip for China called the H20, which this year the U.S. government restricted for export. In July, Nvidia said it had given permission to sell this chip again in China. Later, it was revealed that Nvidia will give 15% of its China chip sales to the U.S. government in exchange for export licenses. Just as it appeared that Nvidia was back in China, it hit other roadblocks, with Chinese authorities raising concerns this month about potential security vulnerabilities in the company's chips. Nvidia said its products do not have "kill switches and backdoors" built into them.

Nvidia's Huang says TSMC among all-time greats: Buying its stock is 'very smart'

Jensen Huang, co-founder and CEO of Nvidia Corp., speaks during a news conference in Taipei on May 21, 2025. Nvidia CEO Jensen Huang on Friday showered praise on Taiwan Semiconductor Manufacturing Co. on a visit to Taiwan, saying that anybody looking to take a stake in the company would be "very smart." This comes at a time when the U.S. administration has signaled interest in acquiring stakes in tech companies, especially those in receipt of funding under the U.S. CHIPS Act. Huang, who said the main purpose of his trip to Taiwan was to thank TSMC for their work on Nvidia's Rubin, its next-generation AI chip platform, made the remarks in response to a query on Washington looking to take a stake in TSMC. "Well, first of all, I think TSMC is one of the greatest companies in the history of humanity, and anybody who wants to buy TSMC stock is a very smart person," he said. Huang said TSMC was making six new products for Nvidia, including a new central processing unit, a hardware component used for computation, and a new general processing unit, used for advanced computation, especially AI. Earlier this week, Reuters had reported that U.S. Commerce Secretary Howard Lutnick was looking at equity stakes in exchange for CHIPS Act funding for companies such as Micron, TSMC and Samsung. The 2022 CHIPS Act, passed with bipartisan support under the Joe Biden administration, has seen grants and loans awarded to chipmakers expanding production in the U.S. as part of efforts by Washington to revitalize U.S. leadership in semiconductor manufacturing. TSMC had been promised $6.6 billion under the act to help build its three cutting-edge chip fabrication plants in Arizona.

How Nvidia's chips became central to the U.S.-China trade war

When Nvidia CEO Jensen Huang revealed Friday that the company is working with the Trump administration on a new computer chip designed for sale to China, it marked the latest chapter in a long-running debate over how the U.S. should compete with China's technological ambitions. The reasoning has sometimes changed -- with U.S. officials citing national security, human rights or purely economic competition -- but the tool has been the same: export controls, or the threat of them. Nvidia believes it can eventually reap $50 billion from artificial intelligence chip sales in China. But it so far has been held back by restrictions imposed by President Joe Biden's administration and then reinforced by President Donald Trump before negotiating a quid pro quo deal. How did these chip export controls start? China has its own chip foundries, but they have historically supplied only low-end processors used in autos and appliances. Beginning in 2014, the Chinese government tried to change that with a new "Big Fund" that invested huge amounts of money into hundreds of semiconductor companies. Meanwhile, the U.S. government, starting in Trump's first term, began cutting off China's access to a growing array of tools to make chips for computer servers, artificial intelligence and other advanced applications. China was particularly irked when it was blocked from buying a machine available only from a Dutch company, ASML, that uses ultraviolet light to etch circuits into silicon chips. The restrictions stalled Chinese efforts to make transistors faster and more efficient by packing them more closely together on fingernail-size slivers. Chinese telecommunications giant Huawei became the public face of the trade tensions, with U.S. claims of its products' potential use for espionage a backdrop for a broader struggle for economic and technological dominance. "We don't want their equipment in the United States because they spy on us," Trump said in 2020 as the administration tightened restrictions to block Huawei from accessing chip technology, at the same time as he was threatening to ban TikTok on similar grounds. Biden ups the ante on chip restrictions President Joe Biden maintained those restrictions after taking office in 2021, but also ramped them up with a series of export controls that blocked sending to China the world's most advanced chips and factory equipment. That affected Chinese sales for California chipmaker Nvidia, the leading designer of the specialized chips needed for artificial intelligence technology. After the first restrictions took effect in 2022, blocking chips including Nvidia's H100, the company designed a new kind of chip that was not quite advanced enough to meet the threshold for restrictions. The Biden administration escalated its restrictions in 2023 to block those newer chips. Then Nvidia again came out with a new kind of chip that could slip into China: the H20. Trump's back-and-forth on the H20 The Trump administration in April halted the sale of the H20 and other advanced computer chips to China over national security concerns, but Nvidia and AMD revealed in July that Washington would allow them to resume sales of their chips, which are used in AI development. After taking a $4.5 billion blow to its finances during the February-April period, Nvidia estimated the export crackdown in China would cost the company another $8 billion in potential sales from May through July. The squandered opportunities fueled Huang's efforts to persuade Trump and other administration officials that the restraints would do more harm than good for the U.S. "The question is not whether China will have AI, it already does," Huang told analysts during a conference call in late May. "The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position." Nvidia and AMD also agreed in August to share 15% of their revenues from chip sales to China with the U.S. government, as part of a deal to secure export licenses for the semiconductors.

Nvidia's CEO says it's in talks with Trump administration on a new chip for China

BANGKOK (AP) -- Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. Huang was asked about a possible "B30A" semiconductor for artificial intelligence data centers for China while on a visit to Taiwan, where he was meeting Nvidia's key manufacturing partner, Taiwan Semiconductor Manufacturing Corp., the world's largest chip maker. "I'm offering a new product to China for ... AI data centers, the follow-on to H20," Huang said. But he added that "That's not our decision to make. It's up to, of course, the United States government. And we're in dialogue with them, but it's too soon to know." Such chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia's top semiconductors today, which cannot be sold to China due to U.S. national security restrictions. The B30A, based on California-based Nvidia's specialized Blackwell technology, is reported to operate at about half the speed of Nvidia's main B300 chips. Huang praised the the Trump administration for recently approving sales of Nvidia's H20 chips to China after such business was suspended in April, with the proviso that the company must pay a 15% tax to the U.S. government on those sales. Chip maker Advanced Micro Devices, or AMD, was told to pay the same tax on its sales of its MI380 chips to China. As part of broader trade talks, Beijing and Washington recently agreed to pull back some non-tariff restrictions. China approved more permits for rare earth magnets to be exported to the U.S., while Washington lifted curbs on chip design software and jet engines. After lobbying by Huang, it also allowed sales of the H20 chips to go through. Huang did not comment directly on the tax when asked but said Nvidia appreciated being able to sell H20s to China. He said such sales pose no security risk for the United States. Nvidia is also speaking with Beijing to reassure Chinese authorities that those chips do not pose a "backdoor" security risk, Huang said. "We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient," he said. The Cyberspace Administration of China, the country's internet watchdog, recently posted a notice on its website referring to alleged "serious security issues" with Nvidia's computer chips. It said U.S. experts on AI had said such chips have "mature tracking and location and remote shutdown technologies" and Nvidia had been asked to explain any such risks and provide documentation about the issue. Huang said Nvidia was surprised by the accusation and was discussing the issue with Beijing. "As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved," Huang said. Unconfirmed reports said Chinese authorities were also unhappy over comments by U.S. Commerce Secretary Howard Lutnick suggesting the U.S. was only selling outdated chips to China. Speaking on CNBC, Lutnick said the U.S. strategy was to keep China reliant on American chip technology. "We don't sell them our best stuff," he said. "Not our second best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool," he said. China's ruling Communist Party has made self-reliance in advanced technology a strategic priority, though it still relies on foreign semiconductor knowhow for much of what it produces. ___ AP Videojournalist Taijing Wu in Taipei contributed to this report.

Nvidia's Jensen Huang in Talks With China to Allay Security Fears Over A.I. Chips

Nvidia's chief executive, Jensen Huang, said Friday that he was in talks with Chinese officials to ease their concerns about security risks associated with one of the company's artificial intelligence chips. The Silicon Valley chip giant was recently granted permission by the U.S. government to sell its H20 semiconductors to China, a move opposed by national security hawks as Washington and Beijing compete for technological and military primacy. It also drew pushback from China. In July, China's internet regulator, the Cyberspace Administration of China, said it had summoned Nvidia to explain "backdoor" functions that would allow the chips to be tracked or remotely shut down remotely. The regulator cited information "revealed by U.S. artificial intelligence experts." Mr. Huang spoke to reporters in Taipei, where he said he was visiting executives at Taiwan Semiconductor Manufacturing Corporation, or TSMC. He said he had made "very clear" to Chinese officials that Nvidia's A.I. chips have no security back doors. "There are no such things," he said. "There never has been. And so hopefully, the response that we've given to the Chinese government will be sufficient. We are in discussions with them." Mr. Huang added that he was "surprised" by the questions, given Beijing's eagerness to acquire the chips needed for advanced A.I systems. "As you know they requested and urged us to secure licenses for the H20 for some time, and I worked quite hard to help them secure the licenses," he said. "Hopefully this will be resolved." Mr. Huang successfully lobbied President Trump to reverse export controls on advanced computing chips going to China. This month, Mr. Trump granted export licenses to Nvidia and another U.S. chipmaker, Advanced Micro Devices, in a highly unusual arrangement where the two companies would pay the U.S. government 15 percent of the money generated from sales of A.I. chips to China. Nvidia is set to release its latest quarterly earnings next week, which traders expect to be a major market-moving event. Nvidia, which dominates the market for A.I. chips, last month became the first public company to reach $4 trillion in market value. Xinyun Wu contributed to this report.

'It's up to, of course, the United States government': Jensen Huang says a new China chip is in the works with Trump weighing in

Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. Huang was asked about a possible "B30A" semiconductor for artificial intelligence data centers for China while on a visit to Taiwan, where he was meeting Nvidia's key manufacturing partner, Taiwan Semiconductor Manufacturing Corp., the world's largest chip maker. "I'm offering a new product to China for ... AI data centers, the follow-on to H20," Huang said. But he added that "That's not our decision to make. It's up to, of course, the United States government. And we're in dialogue with them, but it's too soon to know." Such chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia's top semiconductors today, which cannot be sold to China due to U.S. national security restrictions. The B30A, based on California-based Nvidia's specialized Blackwell technology, is reported to operate at about half the speed of Nvidia's main B300 chips. Huang praised the the Trump administration for recently approving sales of Nvidia's H20 chips to China after such business was suspended in April, with the proviso that the company must pay a 15% tax to the U.S. government on those sales. Chip maker Advanced Micro Devices, or AMD, was told to pay the same tax on its sales of its MI380 chips to China. As part of broader trade talks, Beijing and Washington recently agreed to pull back some non-tariff restrictions. China approved more permits for rare earth magnets to be exported to the U.S., while Washington lifted curbs on chip design software and jet engines. After lobbying by Huang, it also allowed sales of the H20 chips to go through. Huang did not comment directly on the tax when asked but said Nvidia appreciated being able to sell H20s to China. He said such sales pose no security risk for the United States. Nvidia is also speaking with Beijing to reassure Chinese authorities that those chips do not pose a "backdoor" security risk, Huang said. "We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient," he said. The Cyberspace Administration of China, the country's internet watchdog, recently posted a notice on its website referring to alleged "serious security issues" with Nvidia's computer chips. It said U.S. experts on AI had said such chips have "mature tracking and location and remote shutdown technologies" and Nvidia had been asked to explain any such risks and provide documentation about the issue. Huang said Nvidia was surprised by the accusation and was discussing the issue with Beijing. "As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved," Huang said. Unconfirmed reports said Chinese authorities were also unhappy over comments by U.S. Commerce Secretary Howard Lutnick suggesting the U.S. was only selling outdated chips to China. "We don't sell them our best stuff," he said. "Not our second best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool," he said. China's ruling Communist Party has made self-reliance in advanced technology a strategic priority, though it still relies on foreign semiconductor knowhow for much of what it produces. ___ AP Videojournalist Taijing Wu in Taipei contributed to this report.

Nvidia's growth is strong, but investors aren't celebrating

The more Nvidia beats Wall Street's expectations, the harder it seems to satisfy them. The chipmaker reported second-quarter revenue of $46.74 billion, with sales up 56% year over year, and earnings per share of $1.08, easily topping Wall Street's forecasts. The company's gross margins also surged to 72.4%, up from 61% last quarter. For most other companies, the results would be a home run. But for Nvidia, whose quarterly financials have become a litmus test for the AI boom, Wall Street wasn't convinced. Shares fell more than 3% in after-hours trading as the chipmaker came up short of most of Wall Street's most optimistic forecasts. The stock was trading lower in pre-market, down about 1.3%. The market reaction is somewhat paradoxical: Nvidia's core business is still booming, with the company reporting a jump in sales of more than 50%. However, the company narrowly missed data center revenue estimates. "The miss on data center revenue weighs on the name in spite of the broader beat. Though Nvidia is forecasting $54bn in revenue next quarter, traders may see this as a bearish catalyst given some on the Street had estimates as high as $63bn," senior vice president of product and strategy at Direxion, Ryan Lee, said. Investors largely ignored a similar miss last quarter, but this time, likely prompted by recent nervousness that the AI sector may be in a dangerous financial bubble, the stock faltered after the earnings report. "Being priced to perfection leaves little room for error, and traders were left wanting more this quarter," Direxion's head of capital markets, Jake Behan, said. "When any company trades at such high multiples, anything short of exceptional starts to look like a problem. Nvidia's revenue forecast wasn't bad, but it lacked the lofty upside the market was looking for." Nvidia is the AI boom's darling. The company's valuation has been propelled to new heights as tech companies pour millions into AI infrastructure, skyrocketing demand for Nvidia's AI chips. In July, the chipmaker became the first publicly traded company to achieve a $4 trillion market value. The consequence of this industry-leading success is that the company's performance is now seen as a proxy for the broader AI market. Investors, already wary of recent bubble concerns, and an MIT study that found that most companies haven't realized meaningful gains from AI pilots, are hyperconscious of any signs of a dip in demand. Bubble concerns could be bad for both Nvidia's valuation and its customer base of cloud giants and well-funded AI startups, but its latest earnings don't paint a picture of AI spending slowing down. In fact, CEO Jensen Huang said that the company expects to see $3 to 4 trillion in AI infrastructure spending by the end of the decade. Instead, the market reaction may point to a vibe shift in how investors are viewing the AI sector. Over the past few years, investors have largely looked past minor misses and elevated valuations, treating rapid AI spending as a given and betting that demand would continue accelerating across hyperscalers and AI startups alike. But now, even small revenue misses or geopolitical hurdles, such as Nvidia's uncertainty around China sales, are drawing attention, suggesting that investors are no longer willing to give the sector the same benefit of the doubt "If you were waiting for clear signs of a slowdown in AI, you didn't exactly get it," Behan said. "This quarter shows Nvidia is still firmly in the game, navigating geopolitical turbulence and regulatory challenges while maintaining its leadership in the AI space." China is another sore spot for Nvidia. The company has counted on China sales for an extra boost to its numbers in the past, but regulatory uncertainty has prevented it from including any revenue in its second-quarter results. For months, Nvidia has been stuck in regulatory limbo over its H20 chips, which are subject to new U.S. export controls. Earlier this month, Nvidia and AMD struck a deal with the Trump administration to grant licenses in exchange for a 15% revenue-sharing arrangement on China chip sales. Prior to the call, analysts had predicted that Nvidia would not allude to China revenue in the earnings report. During it, CFO Colette Kress said the company recorded no H20 sales to China in the quarter because the 15% duty hasn't been codified into regulation despite some customers receiving licenses in recent weeks. The company estimates it could ship $2 billion to $5 billion in H20s next quarter if restrictions ease, but none of that revenue is baked into its forecast. This could be a problem for Nvidia as access to the Chinese market could be critical for the company, with CEO Jensen Huang describing China as a $50 billion market this year alone. The company also faces rising competition from domestic Chinese chipmakers like Huawei and Cambricon, which are catching up technologically and benefiting from local government support. Nvidia has warned in its filings that it may be effectively blocked from China's data center market if it cannot gain regulatory approval. At the same time, China's AI ecosystem, particularly open-source model development, is thriving. Huang emphasized that Nvidia was continuing to advocate for U.S. approval to bring its Blackwell chips to China, calling it a "real possibility" and a critical part of maintaining U.S. leadership in AI technology. "China's situation is a reminder that no matter how strong a company is, macro forces still matter -- regulation, trade tensions, and global politics are now part of the equation," said Kate Leaman, chief market analyst at AvaTrade.

AI giant Nvidia beats earnings expectations but shares fall

AI powerhouse Nvidia reported quarterly earnings Wednesday that beat expectations, but shares slipped amid concerns about an AI chip spending bubble and the company's stalled business in China. The California-based firm posted profit of $26.4 billion on record revenue of $46.7 billion in the recently ended quarter, driven by intense demand for chips from major tech companies powering AI datacenter computing. While overall revenue significantly increased year-over-year, money taken in from Nvidia's Data Center compute products like its coveted graphics processing units (GPUs) declined 1% from the previous quarter. The drop was driven by a $4 billion decrease in sales of H20 chips -- specialized processors the company designed for the Chinese market, according to the earnings report. For the current quarter, Nvidia projected $54 billion in revenue but said its forecast assumes no H20 sales. Nvidia's high-end GPUs remain in hot demand from tech giants building data centers for artificial intelligence applications. However, investors are questioning whether the massive AI investments are sustainable. "The data center results, while massive, showed hints that hyperscaler spending could tighten at the margins if near-term returns from AI applications remain difficult to quantify," said Emarketer analyst Jacob Bourne. "At the same time, US export restrictions are fueling domestic chipmaking in China." Nvidia shares fell slightly more than 3% in after-market trading. US takes a cut Earlier this month, President Donald Trump confirmed that Nvidia would pay the United States 15% of its revenues from sales of certain AI chips to China. Trump called Nvidia's H20 chips "obsolete," despite their previous targeting under export restrictions. Beijing has responded by expressing national security concerns about Nvidia chips and urging Chinese businesses to rely on local semiconductor suppliers instead. Nvidia developed the H20 specifically for export to China to address US concerns that its top-tier chips could be used for weapons development or AI applications in the rival nation. "There is interest in our H20s; we have supply ready to ship," Nvidia chief executive Jensen Huang said of the China market, which he estimated to be a $50 billion opportunity for Nvidia this year. "We're still waiting on several of the geopolitical issues going back and forth between the governments and the companies trying to determine their purchases and what they want to do." Huang said Nvidia is talking with the Trump administration about the importance of US companies being able to compete in China. "We just have to keep advocating the sensibility of, and the importance of, American tech companies to be able to lead and win the AI race and help make the American tech stack the global standard," Huang said. Fortune in play The earnings report comes amid market worries about an AI spending bubble that could burst and hurt the chip giant's fortunes. Nvidia serves as a bellwether for the AI market and became the first company to reach $4 trillion in market value last July. "We're just seeing just enormous amount of interest in AI and demand for AI right now," Huang said on an earnings call. The top four cloud computing service providers are on pace to spend about $600 billion on AI infrastructure this year, and it's reasonable to think Nvidia is in line for a lot of that money, Huang reasoned.

Nvidia chief says H20 chip shipments to China not a security concern

Taipei (AFP) - Shipping Nvidia's H20 chips to China was "great" for Beijing and Washington and not a security threat, the tech giant's chief said Friday. The California-based company produces some of the world's most advanced semiconductors but cannot ship its most cutting-edge chips to China due to concerns from Washington that Beijing could use them to enhance military capabilities. Nvidia developed the H20 -- a less powerful version of its AI processing units -- specifically for export to China. That plan stalled when the Trump administration tightened export licensing requirements in April. The H20 was "not a national security concern", Jensen Huang told reporters in Taipei, describing the chip as "great for America" and "great for the Chinese market". Huang insisted there were "no security backdoors" in the H20 chip allowing remote access, after China summoned company representatives to discuss security issues. "We have made very clear and put to rest that H20 has no security backdoors, there are no such things, there never has, and so hopefully the response that we've given to the Chinese government will be sufficient," Huang said. He sidestepped a question about reports that Nvidia would pay the United States 15 percent of its revenues from the sale of H20 chips to China, which US President Donald Trump confirmed last week. Instead, Huang expressed gratitude to the Trump administration for allowing the chips to be shipped to the Chinese market. "The demand I believe is quite great and so the ability to ship products to, H20s to China, is very much appreciated," the CEO said. Huang also said Nvidia is in talks with the US government about a new chip for China. "Offering a new product to China for the data center, AI data centers, the follow on to H20, that's not our decision to make. It's up to of course the United States government, and we're in dialogue with them but it's too soon to know," he said. Huang met with Trump at the White House this month and agreed to give the federal government the cut from its revenues, a highly unusual arrangement in the international tech trade, according to reports in the Financial Times, Bloomberg and The New York Times. Investors are betting that AI will transform the global economy, and last month Nvidia -- the world's most valuable company and a leading designer of high-end AI chips -- became the first company ever to hit $4 trillion in market value. The firm has, however, become entangled in trade tensions between China and the United States, which are waging a heated battle for dominance to produce the chips that power AI. It comes as the Trump administration has been imposing stiff tariffs, with goals varying from addressing US trade imbalances, wanting to reshore manufacturing and pressuring foreign governments to change policies. A 100 percent tariff on many semiconductor imports came into effect this month, with exceptions for tech companies that announce major investments in the United States.

What will Nvidia's upcoming earnings report reveal about its AI chip business in China?

Nvidia's business in China will be the focus of investors when the AI chipmaker reports earnings on Wednesday, following an unusual deal with the Trump administration and Beijing's subsequent efforts to stall imports. Caught in the crossfire of Washington and Beijing's ongoing trade war, the fate of Nvidia's China business hangs on where the world's two largest economies land on tariff talks and chip trade curbs. The artificial intelligence chip pioneer recently agreed to pay the U.S. federal government 15% of the sales it made it China in exchange for export licenses, a move that has drawn bipartisan criticism. Beijing -- despite huge appetite for Nvidia's chips in China -- has urged domestic companies to limit purchases over apparent security concerns.

NVIDIA CEO to visit TSMC in Taiwan, first-ever GTC in Washington, D.C. for Rubin AI GPU reveal

TL;DR: NVIDIA CEO Jensen Huang met with TSMC executives in Taiwan, emphasizing the security of H20 AI GPUs amid China's concerns and thanking the US for export approvals. He highlighted AI's global impact, praised TSMC's role, and announced six new AI GPUs debuting at the 2025 GTC conference in Washington D.C. NVIDIA CEO Jensen Huang has flown to Taiwan to meet with key TSMC executives, while also expressing deep gratitude to the US government for approving export licenses for its H20 AI GPUs to China. Jensen noted that while China has recently raised concerns about potential security backdoors inside of NVIDIA chips, there are no such vulnerabilities in H20. The NVIDIA CEO added that the company has provided enough explanations to address any concerns that Beijing may have. During his conversation with President Trump, Jensen underlined the importance of AI, linking it to US chip tariffs, stressing that AI will advance regardless of US participation, but supporting the American technology ecosystem is extremely important. Jensen described TSMC as "one of the greatest companies in human history" and called the Taiwanese contract semiconductor manufacturer a powerful investment destination. Jensen reiterated that the export of H20 AI GPUs to China doesn't pose a national security concern, and that the decision on supplying next-generation AI data center products rests with the decisions of the US government, not NVIDIA. He added that these discussions are ongoing with Washington, but it's still too early to predict an outcome. The NVIDIA CEO will stay in Taiwan for just the day, with his time consumed mainly with a dinner with executives from TSMC. Jensen also announced that NVIDIA's upcoming GTC conference will be held in Washington D.C. for the first time, and that there are not one, not two, but six new AI GPUs that will be included in its next-gen Rubin GPU architecture. GTC Washington D.C. takes place between October 27-29, 2025 at the Walter E. Washington Convention Center, and we'll be ready for all of the announcements.

Nvidia's CEO says it's in talks with Trump administration on a new chip for China

BANGKOK -- Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. Huang was asked about a possible "B30A" semiconductor for artificial intelligence data centers for China while on a visit to Taiwan, where he was meeting Nvidia's key manufacturing partner, Taiwan Semiconductor Manufacturing Corp., the world's largest chip maker. "I'm offering a new product to China for ... AI data centers, the follow-on to H20," Huang said. But he added that "That's not our decision to make. It's up to, of course, the United States government. And we're in dialogue with them, but it's too soon to know." Such chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia's top semiconductors today, which cannot be sold to China due to U.S. national security restrictions. The B30A, based on California-based Nvidia's specialized Blackwell technology, is reported to operate at about half the speed of Nvidia's main B300 chips. Huang praised the the Trump administration for recently approving sales of Nvidia's H20 chips to China after such business was suspended in April, with the proviso that the company must pay a 15% tax to the U.S. government on those sales. Chip maker Advanced Micro Devices, or AMD, was told to pay the same tax on its sales of its MI380 chips to China. As part of broader trade talks, Beijing and Washington recently agreed to pull back some non-tariff restrictions. China approved more permits for rare earth magnets to be exported to the U.S., while Washington lifted curbs on chip design software and jet engines. After lobbying by Huang, it also allowed sales of the H20 chips to go through. Huang did not comment directly on the tax when asked but said Nvidia appreciated being able to sell H20s to China. He said such sales pose no security risk for the United States. Nvidia is also speaking with Beijing to reassure Chinese authorities that those chips do not pose a "backdoor" security risk, Huang said. "We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient," he said. The Cyberspace Administration of China, the country's internet watchdog, recently posted a notice on its website referring to alleged "serious security issues" with Nvidia's computer chips. It said U.S. experts on AI had said such chips have "mature tracking and location and remote shutdown technologies" and Nvidia had been asked to explain any such risks and provide documentation about the issue. Huang said Nvidia was surprised by the accusation and was discussing the issue with Beijing. "As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved," Huang said. Unconfirmed reports said Chinese authorities were also unhappy over comments by U.S. Commerce Secretary Howard Lutnick suggesting the U.S. was only selling outdated chips to China. Speaking on CNBC, Lutnick said the U.S. strategy was to keep China reliant on American chip technology. "We don't sell them our best stuff," he said. "Not our second best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool," he said. China's ruling Communist Party has made self-reliance in advanced technology a strategic priority, though it still relies on foreign semiconductor knowhow for much of what it produces. ___ AP Videojournalist Taijing Wu in Taipei contributed to this report.

Nvidia designs slower B30A chip to meet US restrictions

Nvidia CEO Jensen Huang confirmed talks with the Trump administration about a new B30A chip designed for China under strict US export rules. Nvidia's Chief Executive Officer, Jensen Huang, has confirmed ongoing discussions with the Trump administration concerning a potential new computer chip tailored for the Chinese market. The deliberations center on addressing the restrictions imposed on the sale of advanced semiconductors to China due to U.S. national security concerns. While on a visit to Taiwan, Huang addressed inquiries about the possibility of a "B30A" semiconductor designed for artificial intelligence data centers in China. His visit included meetings with Taiwan Semiconductor Manufacturing Corp. (TSMC), a critical manufacturing partner for Nvidia and the world's leading chip manufacturer. The proposed B30A chip represents Nvidia's efforts to navigate export regulations while still participating in the Chinese market. Huang clarified Nvidia's position, stating, "I'm offering a new product to China for ... AI data centers, the follow-on to H20." He emphasized that the ultimate decision regarding the sale of the B30A chip rests with the U.S. government. "That's not our decision to make. It's up to, of course, the United States government. And we're in dialogue with them, but it's too soon to know," Huang added, underlining the complexities of the regulatory landscape. Graphics processing units (GPUs) like the proposed B30A are instrumental in the development and advancement of AI systems. However, due to U.S. regulations, Nvidia's most powerful semiconductors cannot be exported to China. The B30A is designed to comply with these restrictions while still providing significant capabilities for AI data centers. The chip is reportedly based on Nvidia's Blackwell technology but with adjusted performance specifications to meet export requirements. Reports indicate the B30A chip is engineered to operate at approximately half the speed of Nvidia's flagship B300 chips. This adjustment ensures compliance with U.S. export control measures while allowing Nvidia to offer a viable product for the Chinese market. The compromise in performance reflects the delicate balance Nvidia seeks to strike between business interests and national security concerns. Huang acknowledged the Trump administration's recent decision to permit the sale of Nvidia's H20 chips to China. This approval, which followed a suspension in April of the same year, is contingent upon Nvidia paying a 15% tax to the U.S. government on those sales. Concurrently, Huang noted that Advanced Micro Devices (AMD) faces a similar tax of 15% on sales of its MI380 chips to China. While Huang refrained from commenting directly on the imposed tax, he expressed Nvidia's appreciation for the opportunity to sell H20 chips to China. He asserted that these sales do not pose a security risk to the United States, emphasizing the company's commitment to ensuring its products do not compromise national security interests. Nvidia's strategy involves transparent communication with both U.S. and Chinese authorities. In addition to discussions with the U.S. government, Nvidia is actively engaging with Beijing to address concerns about potential security vulnerabilities in its chips. Huang stated that Nvidia aims to reassure Chinese authorities that its chips do not present a "backdoor" security risk. These assurances are crucial for maintaining Nvidia's standing in the Chinese market and fostering trust with regulatory bodies. "We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient," Huang remarked, highlighting the company's efforts to dispel any doubts regarding the security of its products. These statements aim to counter recent allegations regarding potential vulnerabilities. The Cyberspace Administration of China, the country's internet regulatory agency, recently published a notice on its website referencing purported "serious security issues" associated with Nvidia's computer chips. The notice cited unnamed U.S. experts on AI who claimed that such chips possess "mature tracking and location and remote shutdown technologies." The agency requested Nvidia to provide explanations and documentation addressing these alleged risks. Huang conveyed that Nvidia was surprised by these accusations and is actively engaged in discussions with Beijing to address the concerns. "As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved," Huang stated, reflecting Nvidia's commitment to resolving the security concerns and maintaining its market access in China. Unconfirmed reports suggest that Chinese authorities are also displeased with comments made by U.S. Commerce Secretary Howard Lutnick regarding the sale of outdated chips to China. Lutnick's remarks, made on CNBC, indicated that the U.S. strategy involves maintaining China's reliance on American chip technology by selling them only the "fourth best" chips. This strategy has potentially fueled tensions and reinforced China's resolve to achieve technological self-sufficiency. "We don't sell them our best stuff," Lutnick stated. "Not our second best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool," he added, outlining the U.S. approach to managing technology exports to China. These comments have reportedly resonated negatively within Chinese government circles, intensifying the focus on domestic semiconductor development. China's ruling Communist Party has designated self-reliance in advanced technology as a strategic priority. Despite its current reliance on foreign semiconductor expertise, China is investing heavily in developing its domestic chip manufacturing capabilities. This strategic objective underscores China's long-term ambition to reduce its dependence on foreign technology and enhance its global competitiveness.

Nvidia's CEO says it's in talks with Trump administration on a new chip for China

BANGKOK (AP) -- Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. Huang was asked about a possible "B30A" semiconductor for artificial intelligence data centers for China while on a visit to Taiwan, where he was meeting Nvidia's key manufacturing partner, Taiwan Semiconductor Manufacturing Corp., the world's largest chip maker. "I'm offering a new product to China for ... AI data centers, the follow-on to H20," Huang said. But he added that "That's not our decision to make. It's up to, of course, the United States government. And we're in dialogue with them, but it's too soon to know." Such chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia's top semiconductors today, which cannot be sold to China due to U.S. national security restrictions. The B30A, based on California-based Nvidia's specialized Blackwell technology, is reported to operate at about half the speed of Nvidia's main B300 chips. Huang praised the the Trump administration for recently approving sales of Nvidia's H20 chips to China after such business was suspended in April, with the proviso that the company must pay a 15% tax to the U.S. government on those sales. Chip maker Advanced Micro Devices, or AMD, was told to pay the same tax on its sales of its MI380 chips to China. As part of broader trade talks, Beijing and Washington recently agreed to pull back some non-tariff restrictions. China approved more permits for rare earth magnets to be exported to the U.S., while Washington lifted curbs on chip design software and jet engines. After lobbying by Huang, it also allowed sales of the H20 chips to go through. Huang did not comment directly on the tax when asked but said Nvidia appreciated being able to sell H20s to China. He said such sales pose no security risk for the United States. Nvidia is also speaking with Beijing to reassure Chinese authorities that those chips do not pose a "backdoor" security risk, Huang said. "We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient," he said. The Cyberspace Administration of China, the country's internet watchdog, recently posted a notice on its website referring to alleged "serious security issues" with Nvidia's computer chips. It said U.S. experts on AI had said such chips have "mature tracking and location and remote shutdown technologies" and Nvidia had been asked to explain any such risks and provide documentation about the issue. Huang said Nvidia was surprised by the accusation and was discussing the issue with Beijing. "As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved," Huang said. Unconfirmed reports said Chinese authorities were also unhappy over comments by U.S. Commerce Secretary Howard Lutnick suggesting the U.S. was only selling outdated chips to China. Speaking on CNBC, Lutnick said the U.S. strategy was to keep China reliant on American chip technology. "We don't sell them our best stuff," he said. "Not our second best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool," he said. China's ruling Communist Party has made self-reliance in advanced technology a strategic priority, though it still relies on foreign semiconductor knowhow for much of what it produces. ___ AP Videojournalist Taijing Wu in Taipei contributed to this report.

Nvidia Results to Spotlight Fallout of China-US Trade War

(Reuters) -Nvidia's business in China will be the focus of investors when the AI chipmaker reports earnings on Wednesday, following an unusual deal with the Trump administration and Beijing's subsequent efforts to stall imports. Caught in the crossfire of Washington and Beijing's ongoing trade war, the fate of Nvidia's China business hangs on where the world's two largest economies land on tariff talks and chip trade curbs. The artificial intelligence chip pioneer recently agreed to pay the U.S. federal government 15% of the sales it made it China in exchange for export licenses, a move that has drawn bipartisan criticism. Beijing - despite huge appetite for Nvidia's chips in China - has urged domestic companies to limit purchases over apparent security concerns. Reports have emerged that Nvidia has told some suppliers to suspend production of its China-special H20 chips. But Reuters has reported that Nvidia is developing a new and more powerful chip for China. "We've got to get clarity on these two governments first, whether China wants the chips and whether the administration is going to allow it," said Jamie Meyers, senior analyst at Nvidia shareholder Laffer Tengler Investments. "And if so, how is that going to work?" Last year, China accounted for 13% of Nvidia's revenue. For the second quarter ended July 2025, many analysts did not factor in any revenue from H20 sales in that country given the US approval came late in the quarter, while China's pushback complicates forecast calculations for the year. In May, Nvidia had said the curbs would shave off $8 billion in sales from the July quarter. The curbs led to a $4.5 billion charge in the previous three-month period. Overall, the company is expected to report that second-quarter revenue jumped 53.2% to $46.02 billion, according to LSEG data, a far cry from the triple-digit growth it witnessed for many quarters. But analysts said the overall AI chip business is booming, with strong demand pouring in from tech giants such as Meta and Microsoft , who have expanded their capital budgets. Still, positive commentary on demand from CEO Jensen Huang could boost AI stocks that have sold off recently on worries that investors may be valuing them too highly. Nvidia shares have gained more than a third so far in 2025, a smaller gain for the period than the previous two years. This still outpaces a more than 15% gain in the broader chip index and the benchmark S&P 500 Index's near 10% year-to-date rise. For the third quarter, analysts expect Nvidia to guide to revenue of $52.96 billion, up 51% year-on-year. About $6 billion of that could come from China, analysts from Piper Sandler had estimated with further growth at a 12%-15% rate. But Nvidia could take a 5 to 15 percentage point hit to gross margins on China-bound chips due to the federal deal, with Bernstein analysts estimating it cutting about one point from Nvidia's overall margins. The company's adjusted gross margin is expected to drop nearly 4 percentage points to 72.1% in the second quarter. In the October quarter, gross margin is expected to contract by nearly two points to 73.2%. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sayantani Ghosh and Aditya Soni)

How Nvidia's Chips Became Central to the U.S.-China Trade War

When Nvidia CEO Jensen Huang revealed Friday that the company is working with the Trump administration on a new computer chip designed for sale to China, it marked the latest chapter in a long-running debate over how the U.S. should compete with China's technological ambitions. The reasoning has sometimes changed -- with U.S. officials citing national security, human rights or purely economic competition -- but the tool has been the same: export controls, or the threat of them. Nvidia believes it can eventually reap $50 billion from artificial intelligence chip sales in China. But it so far has been held back by restrictions imposed by President Joe Biden's administration and then reinforced by President Donald Trump before negotiating a quid pro quo deal. How did these chip export controls start? China has its own chip foundries, but they have historically supplied only low-end processors used in autos and appliances. Beginning in 2014, the Chinese government tried to change that with a new "Big Fund" that invested huge amounts of money into hundreds of semiconductor companies. Meanwhile, the U.S. government, starting in Trump's first term, began cutting off China's access to a growing array of tools to make chips for computer servers, artificial intelligence and other advanced applications. China was particularly irked when it was blocked from buying a machine available only from a Dutch company, ASML, that uses ultraviolet light to etch circuits into silicon chips. The restrictions stalled Chinese efforts to make transistors faster and more efficient by packing them more closely together on fingernail-size slivers. Chinese telecommunications giant Huawei became the public face of the trade tensions, with U.S. claims of its products' potential use for espionage a backdrop for a broader struggle for economic and technological dominance. "We don't want their equipment in the United States because they spy on us," Trump said in 2020 as the administration tightened restrictions to block Huawei from accessing chip technology, at the same time as he was threatening to ban TikTok on similar grounds. Biden ups the ante on chip restrictions President Joe Biden maintained those restrictions after taking office in 2021, but also ramped them up with a series of export controls that blocked sending to China the world's most advanced chips and factory equipment. That affected Chinese sales for California chipmaker Nvidia, the leading designer of the specialized chips needed for artificial intelligence technology. After the first restrictions took effect in 2022, blocking chips including Nvidia's H100, the company designed a new kind of chip that was not quite advanced enough to meet the threshold for restrictions. The Biden administration escalated its restrictions in 2023 to block those newer chips. Then Nvidia again came out with a new kind of chip that could slip into China: the H20. Trump's back-and-forth on the H20 The Trump administration in April halted the sale of the H20 and other advanced computer chips to China over national security concerns, but Nvidia and AMD revealed in July that Washington would allow them to resume sales of their chips, which are used in AI development. After taking a $4.5 billion blow to its finances during the February-April period, Nvidia estimated the export crackdown in China would cost the company another $8 billion in potential sales from May through July. The squandered opportunities fueled Huang's efforts to persuade Trump and other administration officials that the restraints would do more harm than good for the U.S. "The question is not whether China will have AI, it already does," Huang told analysts during a conference call in late May. "The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position." Nvidia and AMD also agreed in August to share 15% of their revenues from chip sales to China with the U.S. government, as part of a deal to secure export licenses for the semiconductors.

Nvidia in 'dialogue' with US government on next-gen chip sales to China

Nvidia CEO Jensen Huang said Friday that the company is "in dialogue" with the U.S. government about selling next-generation artificial intelligence (AI) chips to China. "Offering a new product to China for the AI data centers, the follow on to H20, that's not our decision to make," Huang told reporters in Taiwan on Friday. "It's up to, of course, the United States government. And we're in dialogue with them. But it's too soon to know." His comments come after the company struck an unusual agreement with the Trump administration earlier this month to share a portion of its revenue from sales of its H20 chips to China. Both Nvidia and AMD agreed to hand over 15 percent of revenue from their H20 and MI308 chips to secure export licenses following a monthslong halt on sales to China. The deal has raised legal questions given restrictions on export taxes and licensing fees, but experts say it's unclear whether anyone will bring a challenge. Lawmakers on both sides of the aisle have also voiced concerns about the national security implications of boosting Bejing's AI capabilities by providing access to the chips. The Trump administration appears unphased. White House press secretary Karoline Leavitt suggested last week that they could pursue similar agreements with other companies, even as the the legality and mechanics are "still being ironed out" by the Commerce Department. "Right now, it stands with these two companies. Perhaps it could expand in the future to other companies," Leavitt said. "I think it's a creative idea and solution." Trump also indicated that he would consider making a deal on a reduced-capacity version of Nvidia's more advanced Blackwell chip, and Reuters reported Tuesday that the company is developing a new chip for China based on the Blackwell architecture.

Nvidia's CEO Says It's in Talks With Trump Administration on a New Chip for China

BANGKOK (AP) -- Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. Huang was asked about a possible "B30A" semiconductor for artificial intelligence data centers for China while on a visit to Taiwan, where he was meeting Nvidia's key manufacturing partner, Taiwan Semiconductor Manufacturing Corp., the world's largest chip maker. "I'm offering a new product to China for ... AI data centers, the follow-on to H20," Huang said. But he added that "That's not our decision to make. It's up to, of course, the United States government. And we're in dialogue with them, but it's too soon to know." Such chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia's top semiconductors today, which cannot be sold to China due to U.S. national security restrictions. The B30A, based on California-based Nvidia's specialized Blackwell technology, is reported to operate at about half the speed of Nvidia's main B300 chips. Huang praised the the Trump administration for recently approving sales of Nvidia's H20 chips to China after such business was suspended in April, with the proviso that the company must pay a 15% tax to the U.S. government on those sales. Chip maker Advanced Micro Devices, or AMD, was told to pay the same tax on its sales of its MI380 chips to China. As part of broader trade talks, Beijing and Washington recently agreed to pull back some non-tariff restrictions. China approved more permits for rare earth magnets to be exported to the U.S., while Washington lifted curbs on chip design software and jet engines. After lobbying by Huang, it also allowed sales of the H20 chips to go through. Huang did not comment directly on the tax when asked but said Nvidia appreciated being able to sell H20s to China. He said such sales pose no security risk for the United States. Nvidia is also speaking with Beijing to reassure Chinese authorities that those chips do not pose a "backdoor" security risk, Huang said. "We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient," he said. The Cyberspace Administration of China, the country's internet watchdog, recently posted a notice on its website referring to alleged "serious security issues" with Nvidia's computer chips. It said U.S. experts on AI had said such chips have "mature tracking and location and remote shutdown technologies" and Nvidia had been asked to explain any such risks and provide documentation about the issue. Huang said Nvidia was surprised by the accusation and was discussing the issue with Beijing. "As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved," Huang said. Unconfirmed reports said Chinese authorities were also unhappy over comments by U.S. Commerce Secretary Howard Lutnick suggesting the U.S. was only selling outdated chips to China. Speaking on CNBC, Lutnick said the U.S. strategy was to keep China reliant on American chip technology. "We don't sell them our best stuff," he said. "Not our second best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool," he said. China's ruling Communist Party has made self-reliance in advanced technology a strategic priority, though it still relies on foreign semiconductor knowhow for much of what it produces. ___ AP Videojournalist Taijing Wu in Taipei contributed to this report.

Nvidia Reported Record Earnings and It's Not Even Doing Business With China

Want more stock market and economic analysis from Phil Rosen directly in your inbox? Subscribe to Opening Bell Daily's newsletter. Is anyone surprised? Nvidia once again reported record earnings and alleviated concerns that the AI trade was overextended. The stock fell in after-hours trading, though it remains up 31 percent year-to-date and 41 percent over the last 12 months. Here's how the chipmaker did in its fiscal second quarter: This marked the ninth consecutive quarter that year-over-year revenue has grown by more than 50 percent. "If you were waiting for clear signs of a slowdown in AI, you didn't exactly get it," said Jake Behan, head of capital markets for Direxion. "This quarter shows Nvidia is still firmly in the game, navigating geopolitical turbulence and regulatory challenges while maintaining its leadership in the AI space." The company also approved a fresh $60 billion stock buyback program Now, two critical details stand out from Nvidia's results: For context, Nvidia reported $5.5 billion in revenue from China during the first quarter. But with the uncertainty of a trade war, business with China business has effectively been a non-factor in recent months. The stock nonetheless hovers near a record high. "If you are bullish on US-China relations improving OR ANY level of chip sales to China resuming, the stock is cheap," wrote Adam Kobeissi of The Kobeissi Letter following the earnings release. Meanwhile, CEO Jensen Huang said demand is "extraordinary" for Nvidia's new Blackwell chips. "Blackwell is the AI platform the world has been waiting for, delivering an exceptional generational leap -- production of Blackwell Ultra is ramping at full speed," Huang said in a statement. The stock has returned nearly 1,000 percent since OpenAI launched ChatGPT in November 2022. While some commentators have warned of froth, those returns haven't actually kept up with its 12-month forward earnings estimates, as the chart from Matt Cerminaro illustrates. The final deadline for the 2025 Inc. Best in Business Awards is Friday, September 12, at 11:59 p.m. PT. Apply now.

Wall Street Largely Cheers Nvidia's Outlook Even as China Remains an Overhang

Morgan Stanley raised its price target on the stock to $210 from $206 and kept its overweight call on the stock, noting that Nvidia's "growth acceleration is clear." Nvidia's (NVDA) results and outlook are largely good enough to keep the stock market rally going and the company at the forefront of the AI boom, Wall Street has concluded. The company's projection for record third-quarter revenue was met with a bullish reception from analysts including Morgan Stanley and UBS, even as a few, like HSBC, were downbeat due to uncertainty over whether sales of Nvidia's chips to China would resume. The poster child for the AI boom Thursday projected third-quarter revenue of $54 billion, plus or minus 2%, a record level but a tepid forecast versus estimates of around $53.8 billion. Nvidia had issued its projection as it posted better-than-estimated second-quarter results, although key data center business revenue lagged forecasts. Nvidia shares, which entered Thursday up roughly 35% this year at $181.60, are down slightly in premarket trading but have retraced larger after-hours declines following the results. Morgan Stanley raised its price target on the stock to $210 from $206 and kept its overweight call on the stock, saying Nvidia shares are "less expensive than other AI beneficiaries." They said the "bar [set by Nvidia] continues to be high but the growth acceleration is clear." "For the stock to sell off slightly after hours on these types of numbers certainly indicates that sentiment has largely caught up to the growth potential, after fears of digestion just a few weeks ago," they wrote. "But outside of China geopolitics, this is a very clean beat and raise quarter." Nvidia CFO Collette Kress said during the earnings call Thursday that the company hasn't restarted sales of its H20 chips in China yet while the company waits for the U.S. government to formalize its revenue-sharing agreement. Earlier this year, the Trump administration blocked Nvidia's sale of its H20 chips, which the company tailored for the Chinese market, then this month struck a deal where Nvidia would give the government 15% of China chip revenues in exchange for resumed sales. UBS analysts said they were optimistic on the prospects the rally in the AI-driven bull market would continue after Nvidia's results. "The overall strength of the July quarter results may offer some reassurance for investors after signs of stalling momentum for the large-cap tech rally," UBS analysts wrote, adding that "the outlook for large-cap tech remains compelling." Several of Nvidia's major Big Tech clients, including Microsoft (MSFT), Meta (META), Amazon (AMZN), and Google parent Alphabet (GOOGL), have committed to spending big on their AI capacity, and Nvidia said Thursday that one customer spent more than $10 billion last quarter. Kress said late Thursday that the chipmaker anticipates $3 trillion-4 trillion in AI infrastructure spending by the end of the decade. HSBC was less upbeat, however, saying Nvidia hasn't delivered a "beat and raise" quarter since its second-quarter fiscal 2025 earnings last year."We maintain our Hold rating as we expect the near-term supply inconsistency and China uncertainty to remain an overhang," they wrote. Even Morgan Stanley analysts noted that prospects for a resumption of China sales are unclear, and that uncertainties remain around the 15% revenue deal with the government and the need for Beijing to give the green light to resume chip sales. China accounted for 20% of Nvidia's data center revenue at one point and "while it remains a large market, we simply don't know how large it will be when it comes back, or if it comes back at all," the analysts wrote.

Nvidia Tops Wall Street Estimates, But China Tensions Cloud Its A.I. Chip Business

Despite smashing estimates, Nvidia's China struggles and regulations shake investor confidence. Nvidia delivered another estimate-beating quarter, but regulatory setbacks and U.S.-China tensions are casting doubt over its core data center business even as Wall Street continues to demand more from the world's most valuable public company. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Revenue for the May-July quarter jumped 56 percent year-over-year to $46.7 billion, while net income climbed 59 percent to $26.4 billion, reported Nvidia yesterday (Aug. 27). Both figures beat analyst expectations. However, shares fell more than 3 percent after the earnings release as Nvidia's core data center sales slightly missed estimates. The chipmaker's data center revenue, its most important line of business, came in at $41.1 billion for the quarter compared to expectations of $41.3 billion. It was hampered in part by geopolitical tensions between the U.S. and China. Sales of Nvidia's H20 chips, which are designed specifically for the Chinese market in compliance with America's export restrictions, in April were blocked under the Trump administration. Nvidia CEO Jensen Huang has since convinced the President to lift the ban on H20 exports to China, agreeing to cut the government 15 percent of the company's revenue from such sales. However, Washington "has not published a regulation codifying such requirement," said Colette Kress, the company's chief financial officer, on yesterday's earnings call. If restrictions do ease, Nvidia expects $2 billion to $5 billion in H20 revenue in the current quarter, Kress said. That will likely come from Nvidia's existing inventory of H20. The company has reportedly halted H20 production after the Chinese government banned it, citing security risks. Nvidia is said to be developing another China-specific chip. Huang has spent much of the past year shuttling between Washington and Beijing in an effort to soothe over tensions. While speaking to analysts, he stressed China's importance as home to roughly half of the world's A.I. researchers, the second-largest computing market globally and its status as a leader in open-source models through releases from DeepSeek and Qwen. Such advances, Huang argued, should be supported by U.S. technology to "help make the American tech stack the global standard." China's A.I. market could represent a $50 billion opportunity for Nvidia, one that grows at 50 percent a year, said Huang. Globally, A.I.-native startups have already raised $180 billion in 2025, up from $100 billion last year, according to the CEO. Their revenues are growing even faster, reaching $20 billion this year, compared with $2 billion in 2024. "Next year being ten times higher than this year is not inconceivable," he said. In other business, Nvidia's gaming division generated $4.2 billion in quarterly sales, while its professional visualization and equipment manufacturer units brought in $601 million and $173 million, respectively. Nvidia's auto and robotics segment remains small, at just 1 percent of overall sales. Yet its $586 million in revenue marked a 69 percent year-over-year jump, reflecting Nvidia's push into "physical A.I." "As a result of agentic A.I. and vision-language models, we are now seeing a breakthrough in physical A.I. in robotics and autonomous systems," Huang told analysts.

Nvidia in talks with Trump administration on new chip for China: CEO Jensen Huang - The Economic Times

Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. Huang was asked about a possible "B30A" semiconductor for artificial intelligence data centres for China while on a visit to Taiwan, where he was meeting Nvidia's key manufacturing partner, Taiwan Semiconductor Manufacturing Corp, the world's largest chip maker. "I'm offering a new product to China for ... AI data centres, the follow-on to H20," Huang said. But he added, "That's not our decision to make. It's up to, of course, the United States government. And we're in dialogue with them, but it's too soon to know." Such chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia's top semiconductors today, which cannot be sold to China due to US national security restrictions. The B30A, based on California-based Nvidia's specialised Blackwell technology, is reported to operate at about half the speed of Nvidia's main B300 chips. Huang praised the Trump administration for recently approving sales of Nvidia's H20 chips to China after such business was suspended in April, with the proviso that the company must pay a 15 per cent tax to the US government on those sales. Chip maker Advanced Micro Devices, or AMD, was told to pay the same tax on its sales of its MI380 chips to China. As part of broader trade talks, Beijing and Washington recently agreed to pull back some non-tariff restrictions. China approved more permits for rare earth magnets to be exported to the US, while Washington lifted curbs on chip design software and jet engines. After lobbying by Huang, it also allowed sales of the H20 chips to go through. Huang did not comment directly on the tax when asked, but said Nvidia appreciated being able to sell H20s to China. He said such sales pose no security risk for the United States. Nvidia is also speaking with Beijing to reassure Chinese authorities that those chips do not pose a "backdoor" security risk, Huang said. "We have made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has. And so hopefully the response that we've given to the Chinese government will be sufficient," he said. The Cyberspace Administration of China, the country's internet watchdog, recently posted a notice on its website referring to alleged "serious security issues" with Nvidia's computer chips. It said US experts on AI had said such chips have "mature tracking and location and remote shutdown technologies," and Nvidia had been asked to explain any such risks and provide documentation about the issue. Huang said Nvidia was surprised by the accusation and was discussing the issue with Beijing. "As you know, they requested and urged us to secure licenses for the H20s for some time. And I've worked quite hard to help them secure the licenses. And so hopefully this will be resolved," Huang said. Unconfirmed reports said Chinese authorities were also unhappy over comments by US Commerce Secretary Howard Lutnick suggesting the US was only selling outdated chips to China. Speaking on CNBC, Lutnick said the US strategy was to keep China reliant on American chip technology. "We don't sell them our best stuff," he said. "Not our second-best stuff. Not even our third best, but I think fourth best is where we've come out that we're cool," he said. China's ruling Communist Party has made self-reliance in advanced technology a strategic priority, though it still relies on foreign semiconductor know-how for much of what it produces.

How Nvidia's chips became central to the U.S.-China trade war

Nvidia, under CEO Jensen Huang, navigates evolving U.S. chip export controls to China, collaborating with the Trump administration on a new chip design. These restrictions, initially driven by national security and economic concerns, have impacted Nvidia's potential $50 billion AI chip sales in China. Huang argues that limiting U.S. When Nvidia CEO Jensen Huang revealed Friday that the company is working with the Trump administration on a new computer chip designed for sale to China, it marked the latest chapter in a long-running debate over how the U.S. should compete with China's technological ambitions. The reasoning has sometimes changed - with U.S. officials citing national security, human rights or purely economic competition - but the tool has been the same: export controls, or the threat of them. Nvidia believes it can eventually re$50 billion from artificial intelligence chip sales in China. But it so far has been held back by restrictions imposed by President Joe Biden's administration and then reinforced by President Donald Trump before negotiating a quid pro quo deal. How did these chip export controls start? China has its own chip foundries, but they have historically supplied only low-end processors used in autos and appliances. Beginning in 2014, the Chinese government tried to change that with a new "Big Fund" that invested huge amounts of money into hundreds of semiconductor companies. Meanwhile, the U.S. government, starting in Trump's first term, began cutting off China's access to a growing array of tools to make chips for computer servers, artificial intelligence and other advanced applications. China was particularly irked when it was blocked from buying a machine available only from a Dutch company, ASML, that uses ultraviolet light to etch circuits into silicon chips. The restrictions stalled Chinese efforts to make transistors faster and more efficient by packing them more closely together on fingernail-size slivers. Chinese telecommunications giant Huawei became the public face of the trade tensions, with U.S. claims of its products' potential use for espionage a backdrop for a broader struggle for economic and technological dominance. "We don't want their equipment in the United States because they spy on us," Trump said in 2020 as the administration tightened restrictions to block Huawei from accessing chip technology, at the same time as he was threatening to ban TikTok on similar grounds. Biden ups the ante on chip restrictions President Joe Biden maintained those restrictions after taking office in 2021, but also ramped them up with a series of export controls that blocked sending to China the world's most advanced chips and factory equipment. That affected Chinese sales for California chipmaker Nvidia, the leading designer of the specialized chips needed for artificial intelligence technology. After the first restrictions took effect in 2022, blocking chips including Nvidia's H100, the company designed a new kind of chip that was not quite advanced enough to meet the threshold for restrictions. The Biden administration escalated its restrictions in 2023 to block those newer chips. Then Nvidia again came out with a new kind of chip that could slip into China: the H20. Trump's back-and-forth on the H20 The Trump administration in April halted the sale of the H20 and other advanced computer chips to China over national security concerns, but Nvidia and AMD revealed in July that Washington would allow them to resume sales of their chips, which are used in AI development. After taking a $4.5 billion blow to its finances during the February-April period, Nvidia estimated the export crackdown in China would cost the company another $8 billion in potential sales from May through July. The squandered opportunities fueled Huang's efforts to persuade Trump and other administration officials that the restraints would do more harm than good for the U.S. "The question is not whether China will have AI, it already does," Huang told analysts during a conference call in late May. "The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position." Nvidia and AMD also agreed in August to share 15% of their revenues from chip sales to China with the U.S. government, as part of a deal to secure export licenses for the semiconductors.

Nvidia readies new China chip as Washington debates AI exports - The Economic Times

Jensen Huang, Nvidia's CEO, said Friday in Taipei, Taiwan, that the company was offering a "new product for AI data centers," which would be a version of its most cutting-edge chips that would be modified to reduce some of its performance, as required by the United States. He said he was seeking the Trump administration's approval to sell the chip.Weeks after Nvidia struck a deal with the Trump administration to pay for clearance to ship semiconductors to China, the company has started winding down production of a chip designed for Chinese companies and begun work on its more powerful successor. Jensen Huang, Nvidia's CEO, said Friday in Taipei, Taiwan, that the company was offering a "new product for AI data centers," which would be a version of its most cutting-edge chips that would be modified to reduce some of its performance, as required by the United States. He said he was seeking the Trump administration's approval to sell the chip. "It's up to, of course, the United States government," Huang said. "And we're in dialogue with them, but it's too soon to know." Huang's comments came as Nvidia asked suppliers to wind down production of its current chip designed for China, the H20, said two people familiar with the company's strategy. Beijing has discouraged Chinese companies from buying the H20 chips, with administrators warning that the chips could have "backdoor security risks." "We constantly manage our supply chain to address market conditions," said Mylene Mangalindan, a spokesperson for Nvidia. Nvidia's plans for China have divided Washington, where the Trump administration and some congressional leaders are at odds over global AI chip sales. Because the chips are used to build artificial intelligence systems, the U.S. government has weighed whether to limit sales so that U.S. companies can stay ahead of China in the AI race. In April, President Donald Trump blocked sales of the H20 to China, but reversed that decision in July and later struck a deal to take a 15% cut of sales of the chips. Last week, Trump said he was open to cutting a deal to permit Nvidia to sell a successor to the H20, provided it was "somewhat enhanced -- in a negative way." "In other words, take 30% to 50% off of it," Trump said. A chip that is 50% less powerful than the H20 would still have better performance than the chips that companies like OpenAI used to train chatbots as recently as last year, according to Lennart Heim, an information scientist at RAND Corp., a think tank. It would exceed the performance thresholds set by the Biden administration for chips sold to China.

Nvidia CEO in Taipei to visit TSMC, says in talks with US over new China chip - The Economic Times

Nvidia CEO Jensen Huang arrived in Taipei on Friday to visit chip foundry partner TSMC, as the world's most valuable company navigates rising friction between Washington and Beijing over access to its industry-leading AI chips. "My main purpose coming here is to visit TSMC," he told reporters, adding that he would only stay a few hours and leave after dinner with TSMC leaders, according to a live feed broadcast by local media at Taipei's Songshan airport, where he landed in a private jet. TSMC did not immediately respond to a request for comment. US President Donald Trump earlier this month opened the door to the possibility of more advanced Nvidia chips beyond the H20 being sold in China. Reuters earlier this week reported that Nvidia was working on a new chip tentatively named the B30A based on its latest Blackwell architecture that will be more powerful than the H20 model. Asked about the B30A, Huang said Nvidia was in talks with the U.S. over offering China a successor to its H20 chip, but that it was not the company's decision to make. "It's up to, of course, the U.S. government, and we are in dialogue with them, but it is too soon to know." he said. Nvidia only received permission in July to recommence sales of the H20. It was developed specifically for China after export restrictions were put in place in 2023, but the company was abruptly ordered to stop sales in April. Shortly after Washington's greenlight, Nvidia placed orders for 300,000 H20 chips with TSMC to add to its existing inventory due to strong demand from Chinese companies, Reuters reported. But Nvidia was days later hit by allegations from China's cyberspace regulator and state media that the U.S. company's chips could pose security risks. Chinese authorities later cautioned Chinese tech firms about purchasing the H20, raising concerns about potential information security risks. Nvidia says its chips have no backdoor risks. Foxconn has been asked by Nvidia to stop work related to the H20 chip, Reuters reported on Friday citing two people briefed on the matter. A third source said that Nvidia wanted to first work through its existing H20 inventory. Foxconn did not immediately respond to a request for comment. Trade publication The Information reported on Thursday that Nvidia instructed Arizona-based Amkor Technology to stop production of its H20 chips this week and also notified South Korea's Samsung Electronics, citing two people with direct knowledge of the communications. Amkor handles advanced packaging for the chip, while Samsung Electronics supplies high-bandwidth memory chips for the model. Neither company immediately responded to a Reuters request for comment. "We constantly manage our supply chain to address market conditions," Nvidia spokesperson said in a statement, adding, "As both governments recognise, the H20 is not a military product or for government infrastructure." Huang said that shipping the H20 to China was not a national security concern and that the ability to ship the H20 chips to China was "very much appreciated". Earlier this month, the Trump administration reached a deal with Nvidia and AMD under which the U.S. government would receive 15% of revenue from sales of some advanced chips in China.

Explained: Nvidia Q2 results beat estimates. So why did the stock fall?

Nvidia earnings report: Nvidia topped Q2 estimates with record $46.7 billion revenue and a 59% profit jump, but shares fell as softer data center sales and cautious guidance sparked doubts about the AI rally's durability. Nvidia Corp. beat Wall Street forecasts for the second quarter with record revenue, but its stock still fell 3% in after-hours U.S. trading and slid 2.9% in Frankfurt on Thursday, as investors fretted over softer data center sales and a sales outlook that failed to clear sky-high expectations. The chipmaker posted $46.7 billion in Q2 revenue, above estimates of $46.05 billion, with net income surging 59% to $26.4 billion, or $1.05 per share, topping consensus of $1.01. Nvidia also projected third-quarter revenue of about $54 billion, plus or minus 2%, ahead of analysts' $53.1 billion forecast. Yet the stock reaction underscored market unease. Futures tied to the Nasdaq 100 slipped 0.6% as Nvidia's guidance and data center performance raised doubts over whether the AI boom that has added $2 trillion to its market value since April can sustain momentum. Nvidia's growth remains anchored in its data center business, built around its graphics processors and the systems that connect them at scale. The division generated $41.1 billion in revenue, up 56% from a year earlier, but just shy of the $41.3 billion analysts expected. While the gain was substantial, the miss highlighted that even Nvidia's key AI-driving segment may be hitting the limits of near-term demand. For a stock that has soared on expectations of uninterrupted data center expansion, the shortfall was enough to rattle investors and weigh on extended trading. Morgan Stanley analyst Joseph Moore noted earlier this week that data center revenue will remain the key driver of Nvidia's business over the coming year, Forbes reported. The AI giant's forecast also excluded sales to China, where U.S. export restrictions and Beijing's push for homegrown chips have left Nvidia in limbo. The company has yet to ship its H20 processors to Chinese buyers, after booking a $4.5 billion writedown tied to the product. Finance chief Colette Kress told analysts the company could ship $2 billion to $5 billion worth of H20 chips this quarter if the geopolitical environment allowed. In the meantime, Nvidia released $180 million of H20 inventory to a non-China customer during Q2. The uncertainty contrasted sharply with a rally in Chinese rivals' shares Thursday. Semiconductor Manufacturing International Corp rose as much as 9.3%, while Cambricon Technologies climbed 8.2%, lifting the STAR 50 Index of growth stocks by 5%. Despite posting its ninth straight quarter of revenue growth above 50%, Nvidia's 56% year-over-year gain was its slowest during that run. That slowdown, alongside a second miss in data center expectations, was enough to shake confidence in a stock that has already climbed 35% this year after nearly tripling in 2024. Nvidia's gaming division added $4.3 billion in sales, up 49% from a year earlier, while robotics revenue grew 69% to $586 million. The company's board approved another $60 billion in share buybacks, after repurchasing $9.7 billion in the latest quarter. Even so, investors are asking whether Nvidia can keep meeting the market's towering expectations. As Kress reminded analysts, the company still sees $3 trillion to $4 trillion in global AI infrastructure spending by the end of the decade. For now, though, record-breaking numbers weren't enough to prevent a selloff. Also read | AI superstar Nvidia could eclipse India's entire market cap if Cantor's target price is met (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Nvidia stock tanks -- what went wrong despite beating Wall Street's earnings expectations?

Nvidia posted record Q2 earnings but its stock still sank -- here's why data-center revenue, China chip bans, and slowing AI growth rattled Wall Street despite a huge beat. Nvidia's latest quarterly report looked flawless on paper. The chip giant smashed Wall Street's forecasts with record-breaking revenue and profits, yet its stock stumbled, shedding nearly 3% in extended trading. For everyday investors and seasoned market watchers alike, the question is obvious: why would shares fall after such a strong earnings beat? On any other day, those numbers would be celebrated. Nvidia's data-center business alone now generates more revenue than the GDP of many countries. But when a company is priced for perfection, even the smallest miss on a key line item can shake confidence. Wall Street has been laser-focused on Nvidia's AI-driven data-center unit. Analysts expected another blowout quarter, and while growth was massive, it didn't surpass the most bullish forecasts. That marginal shortfall was enough to spark selling. Nvidia confirmed it shipped no H20 AI chips to China during the quarter. These chips had been seen as a way to skirt U.S. export restrictions, but geopolitical roadblocks kept them out of one of the company's largest potential markets. Management excluded China from its Q3 outlook, raising questions about long-term revenue exposure in a $50 billion market. Yes, Nvidia's revenue grew more than 50% -- but it's slower than the triple-digit jumps of prior quarters. Investors betting on "acceleration forever" are being forced to temper their expectations. Markets often punish even slight deceleration in companies priced at extreme valuations. The U.S.-China chip war looms over every earnings call. With Washington tightening export rules and Beijing retaliating, Nvidia sits at the epicenter of one of the most consequential trade battles of our era. That uncertainty is toxic for valuations, especially when so much of Nvidia's future AI demand depends on global adoption. Despite the post-earnings dip, Wall Street remains broadly bullish: Dan Ives of Wedbush called the selloff a "classic case of expectations running ahead of fundamentals." Analysts argue that Nvidia's AI roadmap -- spanning new Blackwell and Rubin chips, robotics, and "reasoning AI" -- supports long-term growth even if quarterly results occasionally wobble. Nvidia's stumble raises a bigger question: are we nearing peak AI hype? Skeptics point to sky-high valuations, U.S.-China trade wars, and slower sequential growth as evidence of an overheated market. Optimists counter with long-term data: AI infrastructure spending is projected to hit $3-$4 trillion by 2030, and Nvidia remains the central player in that investment wave. For long-term investors, the dip may simply reflect short-term profit-taking rather than a structural break in Nvidia's dominance. But it's also a warning: AI is not immune to macro risks. Q1: Why did Nvidia stock fall after beating earnings? Because data-center revenue missed lofty estimates and China chip sales were halted. Q2: What does Nvidia's stock drop mean for investors? It shows short-term risks but long-term AI growth remains strong.

Nvidia CEO says in talks with U.S. over new China chip

Nvidia CEO Jensen Huang arrived in Taipei on Friday to visit chip foundry partner Taiwan Semiconductor Manufacturing Co., as the world's most valuable company navigates rising friction between Washington and Beijing over access to its industry-leading artificial intelligence chips. "My main purpose coming here is to visit TSMC," he told reporters, adding that he would only stay a few hours and leave after dinner with TSMC leaders, according to a live feed broadcast by local media at Taipei's Songshan airport, where he landed in a private jet. He also said that TSMC had asked him to deliver a speech. TSMC did not immediately respond to a request for comment.

NVIDIA CEO Huang Breaks Silence On Talks With Trump & Is Seemingly Surprised By Rumors Of Chinese Government Targeting H20 GPUs

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. NVIDIA CEO Jensen Huang is surprised by rumors about Chinese authorities seeking to limit the sales of its H20 GPUs. Huang spoke with reporters at Taiwan as he landed in the island for a meeting with TSMC's executives. Huang shared that he hopes that the issues with the Chinese government will be resolved as it was the Chinese authorities which had requested him to work with the Trump administration to secure lives for the H20 GPUs. I'm Grateful The H20 Licenses Were Approved, Says NVIDIA CEO When Asked About 15% Sales Commission To US Government Apart from discussing NVIDIA's upcoming Rubin GPUs, Huang also commented on rumors about the H20 GPU. When asked about them, he responded that he was "very grateful that the Trump administration has approved licenses for us to export H20s to China." Huang then added that China had recently "asked some questions about some security backdoors in our chips." In response to the Chinese concerns, Huang asserted that we have "made very clear and put to rest that H20 has no security backdoors. There are no such things. There never has." As a result, he's hopeful that the "response that we've given to the Chinese government will be sufficient." Commenting on what appeared to be the rumors of Chinese government restricting local adoption of the H20 chips, Huang shared: "We are in discussions with them, we are surprised by that, as you know they've requested and urged us to secure licenses for the H20s for some time and I've worked quite hard to help them secure the licenses. And so hopefully, hopefully, this will be resolved." The NVIDIA CEO was then asked about what he had advised President Trump as part of his efforts to have sanctions lifted on NVIDIA's products. Huang replied that while he hadn't provided Trump with any advice, he did inform the President "about the importance of the American AI tech stack." He asserted that we are in the "beginning of a new Industrial Revolution," which means that "AI models and AI applications in support of the American tech stack is very important." The industrial revolution and the role American products play in it were the first things that Huang explained. He then explained to Trump that "AI is going to advance around the world with or without the United States. And it is important for us to maximize our AI export technology at a time when this industry is being formed." As for his thoughts about NVIDIA having to pay 15% of its China H20 GPU sales revenue to the US government, Huang is just "very grateful that the Trump administration has approved licenses for our Chinese customers." The demand for AI in China is "quite great," he believes, which means that the "ability to ship products to H20s to China is very much appreciated." "Shipping H20s to China is not a national security concern. It's great for America and it's great for the Chinese market," he added.

NVIDIA CEO Huang's Hidden Agenda In Surprise Taiwan Visit Seemingly Revealed By Analyst

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. NVIDIA CEO Jensen Huang is in Taiwan to discuss tariffs and transfer pricing concerns with TSMC. Huang made headlines earlier today when he gave a small talk to the media after lading in the island. The NVIDIA shared explained that he was in Taiwan to discuss NVIDIA's next-generation Rubin AI chip and discussed other topics such as Chinese concerns about the H20 GPU having security backdoors and his conversations with President Donald Trump as part of receiving the H20 AI GPU export license. In his talk with reporters, Huang outlined that he was in Taiwan to meet with TSMC executives since the firm's Vera Rubin AI GPUs have reached the tapeout phase at TSMC. A tapeout involves transferring a chip's design to the photomask before officially kicking off early-stage production to map out potential defects. NVIDIA's shares have lost 3.7% over the past five days as investors have rotated out of AI stocks. However, according to a report from Taiwan's Economic Daily, the NVIDIA CEO is also in Taiwan to discuss the impact of tariffs on his firm's products and transfer pricing with TSMC's management. Transfer pricing is the price that a company charges to buy and sell products within itself to subsidiaries, and the practice is often used to lower a firm's tax burden. The NVIDIA CEO's visit to Taiwan comes as rumors claim that the Trump administration is seeking to take equity stakes in TSMC. While reporting from the Wall Street Journal has denied the rumors, the shares nevertheless continued to see weak buyer interest in Taiwan. In his talk at the airport, Huang praised TSMC and called it the greatest company in the world when asked about TSMC's shares. In its report, the UDN quotes an analyst as saying that the real reason behind Huang's visit to Taiwan is to discuss production capacity allocation globally, minimize tariffs for NVIDIA's products and discuss transfer pricing with TSMC's management. The transfer pricing issue is reportedly a problem for TSMC's side, with TSMC CEO Dr. C.C. Wei and Huang meeting to ensure the best outcome for both parties. In global supply chains, transfer pricing refers to the price of goods that one business of a company charges another. It allows companies to lower their tax burden by shifting profits to regions with lower tax rates. TSMC's Arizona chip site is managed by its subsidiary TSMC Arizona, and potential transfer price discussion between Huang and Wei could include the Arizona subsidiary selling the chips to its parent company for NVIDIA to buy or vice versa. It is likely that NVIDIA is able to avoid the brunt of the Trump administration's semiconductor tariffs due to its $500 billion US data center investment plan and some chip procurement from TSMC's Arizona plant. However, the majority of TSMC's production capacity - including that of leading-edge nodes such as 3-nanometer and 2-nanometer - is in Taiwan, making it unclear whether NVIDIA or TSMC might be caught in the middle of the tariff war.

Stock Market Today: Nvidia Slips Despite Strong Earnings and Guidance | The Motley Fool

Nvidia shares edged lower Thursday as stellar quarterly results were overshadowed by China-related uncertainty. Nvidia (NVDA -0.66%) closed at $180.12, down 0.82%. Trading volume surged to 278 million shares, well above the 178 million three-month average. The chipmaker, valued at $4.4 trillion, traded as high as $184.47 intraday, just shy of its 52-week peak of $184.48. Nvidia's second-quarter revenue surged 56% year-over-year and topped estimates, with adjusted earnings also exceeding forecasts. Guidance for the current quarter came in ahead of Wall Street expectations. Still, management refrained from including any H20 AI chip sales to China in its outlook due to unresolved geopolitical issues. CEO Jensen Huang said the company has U.S. licenses to sell $3 billion-$5 billion of H20 chips to Chinese clients and confirmed talks with the Trump administration over the potential sale of its next-generation Blackwell chips to China. Investors will be watching for developments on China chip approvals as the next major catalyst for Nvidia shares.

Nvidia results to spotlight fallout of China-U.S. trade war

Nvidia's business in China will be the focus of investors when the AI chipmaker reports earnings on Wednesday, following an unusual deal with the Trump administration and Beijing's subsequent efforts to stall imports. Caught in the crossfire of Washington and Beijing's ongoing trade war, the fate of Nvidia's China business hangs on where the world's two largest economies land on tariff talks and chip trade curbs. The artificial intelligence chip pioneer recently agreed to pay the U.S. federal government 15 per cent of the sales it made it China in exchange for export licenses, a move that has drawn bipartisan criticism. Beijing - despite huge appetite for Nvidia's chips in China - has urged domestic companies to limit purchases over apparent security concerns. Reports have emerged that Nvidia has told some suppliers to suspend production of its China-special H20 chips. But Reuters has reported that Nvidia is developing a new and more powerful chip for China. "We've got to get clarity on these two governments first, whether China wants the chips and whether the administration is going to allow it," said Jamie Meyers, senior analyst at Nvidia shareholder Laffer Tengler Investments. "And if so, how is that going to work?" Last year, China accounted for 13 per cent of Nvidia's revenue. For the second quarter ended July 2025, many analysts did not factor in any revenue from H20 sales in that country given the US approval came late in the quarter, while China's pushback complicates forecast calculations for the year. In May, Nvidia had said the curbs would shave off US$8 billion in sales from the July quarter. The curbs led to a $4.5 billion charge in the previous three-month period. Overall, the company is expected to report that second-quarter revenue jumped 53.2 per cent to $46.02 billion, according to LSEG data, a far cry from the triple-digit growth it witnessed for many quarters. But analysts said the overall AI chip business is booming, with strong demand pouring in from tech giants such as Meta and Microsoft, who have expanded their capital budgets. Still, positive commentary on demand from CEO Jensen Huang could boost AI stocks that have sold off recently on worries that investors may be valuing them too highly. Nvidia shares have gained more than a third so far in 2025, a smaller gain for the period than the previous two years. This still outpaces a more than 15 per cent gain in the broader chip index and the benchmark S&P 500 Index's near 10 per cent year-to-date rise. For the third quarter, analysts expect Nvidia to guide to revenue of $52.96 billion, up 51 per cent year-on-year. About $6 billion of that could come from China, analysts from Piper Sandler had estimated with further growth at a 12 per cent-15 per cent rate. But Nvidia could take a five to 15 percentage point hit to gross margins on China-bound chips due to the federal deal, with Bernstein analysts estimating it cutting about one point from Nvidia's overall margins. The company's adjusted gross margin is expected to drop nearly four percentage points to 72.1 per cent in the second quarter. In the October quarter, gross margin is expected to contract by nearly two points to 73.2 per cent.

Nvidia shares fall as chipmaker's China business remains uncertain

STORY: Shares in chipmaking giant Nvidia tumbled on Wednesday with the company's business in China still in limbo. The company posted a lukewarm outlook because it doesn't include any potential sales in China in the third quarter. It was still a huge number at a forecast of $54 billion, above analyst expectations of $53 billion. However, that disappointed some investors used to blowout results from one of the top performers on the market. That clipped about $110 billion from its market cap, an amount greater than the entire value of its rival Intel. CEO Jensen Huang said he expects to restart selling to China after striking a deal with U.S. President Donald Trump. The U.S. government is set to take a slice of Nvidia's chip sales to China. However, formal rules are not yet in place, and it's unclear whether Chinese regulators will discourage purchases of Nvidia chips. In May, Nvidia expected trade-war curbs to shave $8 billion in sales from its second quarter. If geopolitical issues subside and it gets more orders, Nvidia said it could add $2 billion to $5 billion in H20 revenue in Q3. Brian Colello, equity strategist for Morningstar, says there's more to consider for Nvidia's long-term outlook: "We were impressed with some of the discussion about what they're seeing over the next few years. They're calling for 3 to $4 trillion of data center infrastructure spend over the next five years - Nvidia's been capturing about a third of that." "This year, they're at a $10 billion run rate on their networking, which is a cherry on top of everything they're doing in GPUs. That layer and that ability of Nvidia to expand into networking in addition to its GPU dominance has been really impressive in our eyes. So there's a lot still to like with Nvidia, even if there's some turmoil with China." Big tech names Meta and Microsoft have been spending liberally to support their AI ambitions. Nvidia is the biggest beneficiary, with a significant chunk of this spending funneled toward its chips. Governments as well, have been key customers. Nvidia says "sovereign AI" efforts - a push to sell AI chips and software to governments around the world - are on track to generate $20 billion in revenue this year. China though, is rushing work to reduce its dependency on Nvidia - having in the past made clear its security concerns about Nvidia's China-special H20 chips. According to the Financial Times Wednesday, Beijing aims to triple AI chip output in 2026, with Huawei aiming to start production by the end of this year at a plant dedicated to making AI chips, and two more such facilities set to launch next year.