If the US government maintains the prohibition on the sale of \u00a0avant-garde chips\u00a0 for artificial intelligence (AI) to China, Nvidia stands to lose a staggering \u00a0$15 billion\u00a0 in revenue this year. This information comes from a recent report on how the company, led by \u00a0Jensen Huang\u00a0, articulated the challenging market dynamics during his meeting with \u00a0Donald Trump\u00a0 last week. The discussion appears to have had a positive outcome, as Nvidia is set to resume sales of its \u00a0H20 GPU\u00a0 to Chinese clients soon.<\/p>\n
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In the last fiscal year, which concluded on January 26, 2025, China accounted for roughly \u00a013%\u00a0 of Nvidia’s overall revenues, translating to about \u00a0$17 billion\u00a0. Notably, China ranks as the company’s third-largest market, just behind the \u00a0United States\u00a0 and \u00a0Taiwan\u00a0. However, the sanctions imposed by the US government pose a significant threat to Nvidia\u2019s operations within this crucial Asian market. Currently, the company is unable to sell its most advanced chips to Chinese clients.<\/p>\n
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The initial reception of the \u00a0H20 GPU\u00a0 by Chinese clients was overwhelmingly positive, even though the capabilities of this chip are relatively inferior compared to Nvidia’s more advanced offerings. Initially, the US Department of Commerce permitted the sale of these chips to China because they complied with the imposed restrictions. Despite its limitations, sales of the H20 GPU surged by \u00a050%\u00a0 quarter-over-quarter following its introduction to the Chinese market in mid-2024.<\/p>\n
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<img alt=\"Quantum physics has radically changed our lives\" width=\"375\" height=\"142\" src=\"https:\/\/i.blogs.es\/43060d\/tunelcuaantico-ap\/375_142.jpeg\"\/><\/code><\/pre>\n<\/div>\n<\/div><\/div>\n<\/div>\nHowever, things took a turn for the worse for Nvidia in mid-April. The \u00a0US Department of Commerce\u00a0 implemented new export restrictions that effectively halted the shipment of the H20 GPU to China. As a result, Nvidia’s stock plummeted, losing \u00a06%\u00a0 in value, as the company missed commitments related to this particular GPU.<\/p>\n
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\n\nNvidia successfully persuaded the Department of Commerce to review regulations, allowing sales of the H20 GPU in China once again.<\/p>\n<\/p><\/div>\n<\/div>\n
Chinese customers who had initially ordered sizable quantities of the H20 GPU included major corporations such as \u00a0Tencent\u00a0, \u00a0Alibaba\u00a0, and \u00a0Bytedance\u00a0. Finally, as indicated in the introduction, Nvidia managed to convince the US Department of Commerce to reassess its regulations, now permitting the sale of the H20 GPU to China again. \u201cThe US government has assured us that licenses will be granted. We hope to begin deliveries soon,\u201d stated a representative from Nvidia.<\/p>\n
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Moreover, in June, the \u00a0Taiwan Semiconductor Manufacturing Company (TSMC)\u00a0, the world\u2019s largest chip manufacturer, commenced the production of a new GPU for Nvidia utilizing the latest \u00a0Blackwell microarchitecture\u00a0. This chip is expected to be crucial for Nvidia’s strategy to retain its \u00a0dominance in the Chinese market\u00a0. However, the company will still require approval from the US Department of Commerce before any shipments can be made to China.<\/p>\n
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Currently, we know that this upcoming AI chip will be less advanced than the H20 GPU, which is an expected development. Its price range is anticipated to be between \u00a0$6,500\u00a0 and \u00a0$8,000\u00a0. While this appears steep for average users, it is considered moderate within the professional GPU market for AI applications. For context, the H20 GPU is priced between \u00a0$10,000\u00a0 and \u00a0$12,000\u00a0, indicating Nvidia\u2019s intention to remain competitive and discourage Chinese rivals like \u00a0Huawei\u00a0 and \u00a0Moore Threads\u00a0 from capturing significant market share.<\/p>\n
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Image | Nvidia<\/a><\/p>\nMore information | Reuters<\/a><\/p>\nIn Xataka | The US gives Huawei a great opportunity: to get its new chip for AI with the Nvidia market in China<\/p>\n