China is in a brutal battle with the United States to gain the upper hand in artificial intelligence (AI) development. Nvidia Corp. (NASDAQ: NVDA) has the world’s most advanced chips. Its CEO, Jensen Huang, sees a massive market in China, but the odds of selling the company’s most advanced products there have swung back and forth.
Quick Read
- Nvidia Corp. (NASDAQ: NVDA) says it has “zeroed out” its revenue forecast for China.
- Nvidia is caught in a brutal battle between China and the United States for the upper hand in AI development.
- Nvidia made early investors rich, but there is a new class of ‘Next Nvidia Stocks’ that could be even better; learn more here.
The swing is mostly a trade issue. President Trump recently said China cannot have Nvidia’s top-shelf Blackwell chips. The Chinese can, however, have less powerful Nvidia products. Trump said on “60 Minutes” that the best of the best chips were for American companies so they could keep a strategic advantage. If America wants to be the AI leader worldwide, China cannot have its most important weapon.
In July, U.S. Commerce Secretary Howard Lutnick went as far as to taunt the Chinese. Regarding China he said, “We don’t sell them our best stuff, not our second best stuff, not even our third best.” The Chinese reaction was that they made their own chips and would make them better. And they called his comments “insulting.” The Chinese government said it did not even want its companies to buy Nvidia’s less powerful product, the H20. Regardless of whether it was posturing, suddenly, Nvidia’s prospects fell again.
A recent chapter of the Nvidia China trade was the meeting last week between Trump and Chinese leader Xi Jinping. Maybe Trump would come out of the meeting with a deal for Nvidia to move into China. Then Trump made his “60 Minutes” statement.
One thing Nvidia regularly admits is that China would add billions of dollars to its already skyrocketing revenue. At one point, the forecast was as high as $50 billion. At another, Nvidia said it had “zeroed out” its revenue forecast for the world’s second-largest nation based on gross domestic product.
The trade relationship between China and the U.S. is unstable. Huang is known to be dogged in pursuit of Nvidia’s goals and has a relationship with Trump. For now, however, it looks like Nvidia’s big chance of revenue from China is over.
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