Nvidia to stop including China in its forecasts amid the U.S. chip controls

In an interview, Nvidia CEO Jensen Huang revealed that the company will exclude the Chinese market from its revenue forecast due to imposed restrictions on Chip sales to China. The export restrictions cost Nvidia $2.5 billion in sales in Q1 2025 and an expected $8 billion in Q2 2025.  

According to Huang, Nvidia is not counting on the U.S. to ease the restrictions, and whether it happens would be a bonus to the company. The Trump administration has recently tightened restrictions on selling Nvidia H20 AI chips to China, fearing that Beijing will use them to boost its military and AI capabilities. Nvidia stock has dropped by 1.43% today, currently trading at $142.92.

Trump tariffs fail to meet their goals

Jensen Huang, Nvidia CEO, insisted on criticizing the April Trump tariff on chip exports that prevented the sale of their most advanced AI chips to China. According to him, the goals of the export controls are not being achieved. He believes the goals must be well articulated and tested over time to achieve a desired outcome. Huang revealed last month at a conference in Taiwan that the U.S. curbs on chip exports were a failure and warned that they were doing the U.S more harm than the Chinese businesses.

Gil Luria, D.A. Davidson Analyst, said that beyond next quarter, there may be some downside to expectations of the 2026 calendar if Nvidia fails to resume sales in China. Currently, Nvidia is still evaluating its limited options for the Chinese market. The chip maker added that until it settles on a new product design and receives approval from the Federal government, they are effectively closed from China’s $50 billion data center market.   

The Trump administration aims to lead the AI revolution. At the Artificial Intelligence Summit in Paris early this year, JD Vance , Vice President of the U.S., revealed that excessive regulation of the AI sector would kill the industry before its onset. The competition between the U.S. and China’s AI revolution has found Nvidia in the middle of the tech race. 

Dan Ives, global head of technology research at Wedbush Securities, said that cutting down export controls would prevent China from gaining a competitive edge in AI. He added that with the AI revolution taking on another gear, China needs to get access to the H20 chips; otherwise, they would be handing over Nvidia’s business to Huawei on a silver platter.

Nvidia reveals that any sales to China would be an upward surprise 

The Chip maker reported $4.6 billion in Q1 revenue from H20 chip sales as customers rushed to import the chips before the Trump tariffs kicked in. China business accounts for 12.5% of overall Nvidia revenue; therefore, by zero-basing China, Nvidia removes the volatile variable neither Wall Street nor the Commerce Department can reliably handicap, according to Michael Ashley Schulman, CIO of Running Point Capital. He added that any Chinese sales would be an upside surprise to the company.

Kevin Hassett, Director of the U.S. National Economic Council, said on Monday during negotiations in London that the Trump administration might be open to easing restrictions on the sale of microchips to China that they deem critical to the manufacturing sector. He added that the American government will maintain restrictions on the high-end Nvidia chips capable of powering AI systems.

Nvidia has maintained its position as a major AI player globally by announcing a potential project to build the first cloud computing platform in Europe. The platform will focus on Industrial artificial Intelligence applications and use Nvidia’s Blackwell architecture to power the AI infrastructure. The AI factory will be based in Germany and feature 10,000 GPUs, including Nvidia DGX B200 systems and RTX Pro Servers. 

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