Nvidia Identifies Major Sales Potential in China, but Securing the Market Has Proven Challenging

Nvidia Eyes Major Growth in China Amid Political Obstacles

Patrick T. Fallon / AFP / Getty Images

Nvidia's CEO, Jensen Huang, has highlighted the immense potential of the Chinese market, estimating it could generate as much as $50 billion in annual revenue for the company.

Main Points

• Jensen Huang announced that Nvidia is preparing to introduce its H200 AI chip to China, following recent approval from former President Trump.
• However, recent actions by Chinese authorities to block these sales may jeopardize Nvidia’s expansion plans in the region.

Will Nvidia be able to expand its AI chip sales in China? Although investors see significant promise, navigating the regulatory landscape has proven difficult.

This week, Huang reiterated Nvidia’s enthusiasm for launching the H200 AI chip in China, after securing U.S. government approval in return for a 25% share of sales. CFO Colette Kress mentioned that U.S. officials are working intensively on the specifics, and Nvidia anticipates shipping products to China soon.

Despite these developments, Beijing’s recent directive for companies to suspend H200 orders threatens to derail Nvidia’s ambitions. According to The Information, China may soon require businesses to prioritize domestic chips. Nvidia has not commented on these reports.

Why This Matters

Even with new export licenses and the prospect of substantial revenue from China, Nvidia still faces significant political barriers before these sales can materialize.

Greater access to China’s market, which Huang values at $50 billion annually, could fuel considerable growth for Nvidia, whose total revenue is projected to surpass $210 billion this year. Notably, the company’s recent forecasts have not factored in potential sales of the H200 or the H20 chips in China, despite earlier U.S. approvals.

The H20, a chip tailored for China, has also encountered resistance from Chinese regulators, even after receiving U.S. approval. Domestically, there is bipartisan opposition among U.S. lawmakers seeking to halt these sales.

Analysts at Morgan Stanley recently noted that while Chinese AI chip sales could boost Nvidia’s performance, they have excluded these figures from their main projections due to ongoing political uncertainty. Jefferies and Bernstein analysts, who also rate the stock positively, have expressed doubts about the likelihood of these sales proceeding.

Nvidia’s stock price increased by about 1% on Wednesday, remaining relatively stable for 2026 after a nearly 40% surge the previous year.