The question of whether NVIDIA can succeed in the AI industry without China is complex and heavily depends on current geopolitical developments. NVIDIA is one of the leading providers of AI chips and has focused heavily on the Chinese market to capitalize on the booming demand for AI technologies.
Impact of US Export Restrictions
The US government imposed restrictions on the export of NVIDIA’s H20 AI chips to China in April 2025, which has significantly impacted the chip designer. These restrictions are part of a broader trade conflict between the US and China that also affects other technology companies.
H20 Chips and Their Significance
The H20 chips were specifically developed for the Chinese market, as they represent a stripped-down version of modern AI chips that could be sold under the existing export restrictions. Since these chips cannot be further stripped down, they are now also subject to the export restrictions.
Financial Impact
NVIDIA estimates that the tightened export restrictions will result in a revenue loss of approximately $15 billion, in addition to the already reported write-offs of $5.5 billion for inventory. This shows how heavily NVIDIA relies on the Chinese market and how much the export restrictions affect the company.
Strategic Impact
Despite the challenges posed by the export restrictions, it is unlikely that China will completely halt its AI developments. NVIDIA’s CEO Jensen Huang warns that US policy could lead to an isolated AI industry in China that will compete with the American AI industry in the long run.
Conclusion
NVIDIA cannot be as successful in the AI industry without the Chinese market, as this market is crucial for the company. The export restrictions exacerbate the challenges for NVIDIA and have significant financial and strategic implications for the company and financial markets. In the long run, this could lead to a shift in the global AI landscape, with possible consequences for the competitiveness of American technology companies.