Nvidia Won Back Access to China's AI Market. So Why Is Beijing Slamming the Door Again?

Nvidia previously relied on China as a major growth driver, with China accounting for about one-fifth of data center revenue at its peak. U.S. export restrictions tightened under the Biden administration and later under President Trump, targeting advanced AI chips and related accelerators, including Nvidia’s A100 and H100 GPUs and China-specific variants such as the H800. By early 2025, Nvidia’s China revenue had fallen to low single digits of total sales. Nvidia’s overall business continued to expand as AI spending surged outside China, with revenue rising sharply in fiscal 2024 and again in fiscal 2025’s first nine months. Even with renewed approvals for shipments of H200 GPUs, China did not immediately resume large-scale purchases.

"For years, Nvidia treated China as one of its most important growth engines. At one point, the country accounted for roughly 20% of Nvidia's data center revenue. Then geopolitics stepped in. First under the Biden administration, and later under President Trump, Washington tightened restrictions on exporting advanced AI chips to China. The goal was straightforward: slow China's technological progress. But the policy appears to have achieved the opposite result."

"Beginning in 2022, the Biden administration imposed export controls on advanced semiconductors and AI accelerators, including Nvidia's A100 and H100 GPUs. Those restrictions expanded over time to include modified chips Nvidia specifically designed for China, such as the H800. By early 2025, Nvidia's China business had largely dried up. CEO Jensen Huang said in prior earnings discussions that China revenue had fallen to low single digits as a percentage of total sales."

"Meanwhile, Nvidia's overall business kept expanding because AI spending exploded elsewhere. Revenue surged 126% in fiscal 2024 to $60.9 billion, then climbed another 134% through fiscal 2025's first nine months. That growth masked the hole China left behind. Still, investors shouldn't underestimate the long-term strategic loss. China remains the world's second-largest economy and one of the largest AI infrastructure markets on the planet."

"Last week, after Trump met with Chinese President Xi Jinping, the U.S. reportedly approved renewed shipments of Nvidia's H200 GPUs to China. That sparked immediate interest from Chinese technology giants, but the renewed access still did not translate into a rapid return of Nvidia chip sales. China once again seems to have shut the door again on renewed Nvidia chip sales."

Read at 24/7 Wall St.