Huang Says Rules Shut Nvidia Out of $50B China Market, Gives Rivals Long-Term Edge
Founder, President and CEO Jensen Huang said new U.S. export restrictions on Nvidia’s H20 GPU product line inadvertently empower Chinese competitors while limiting American influence.
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Given that half of the world’s AI researchers are in China, Huang said cutting U.S. access weakens American global leadership. Huang criticized the foundational assumptions of U.S. policy, asserting that China’s ability to innovate won’t be harmed by the loss of American technology. Huang emphasized the scale of lost opportunity in China—both as a commercial market and a hub for AI innovation.
“China is one of the world’s largest AI markets and a springboard to global success,” Huang told investors Wednesday. “With half of the world’s AI researchers based there, the platform that wins China is positioned to lead globally. Today, however, the $50 billion China market is effectively closed to U.S. industry.”
Nvidia’s sales in the quarter ended April 27, 2025, surged to $44.06 billion, up 69.2% from $26.04 billion the year prior. The firm’s net income jumped to $18.78 billion, or $0.76 per diluted share, up 26.2% from $14.88 billion, or $0.60 per diluted share, the year prior. Nvidia’s stock climbed $6.59 – or 4.89% – to $141.40 per share in after-hours trading, which is the highest the firm’s stock has traded since Jan. 24 (see: Nvidia’s Huang: DeepSeek Fuels Explosion in AI Compute Needs).
How New U.S. Export Control Rules Will Fuel China’s Rise
By shielding Chinese chipmakers from American competition, Huang said U.S. export control policies unintentionally bolster Chinese firms globally, thereby undermining American infrastructure leadership in AI, 6G, and quantum computing. Export controls that isolate a market as significant as China from U.S. technology do more harm than good, Huang said, driving global talent into the arms of America’s rivals.
“The U.S. has based its policy on the assumption that China cannot make AI chips,” Huang said. “That assumption was always questionable and now it’s clearly wrong. China has enormous manufacturing capability. In the end, the platform that wins the AI developers wins AI. Export controls should strengthen U.S. platforms, not drive half of the world’s AI talent to rivals.”
Huang said Nvidia can no longer sell or repurpose large quantities of its advanced AI hardware designed for Chinese data centers, necessitating a massive inventory write-off. Although Nvidia managed to book $4.6 billion in Q1 revenue from H20 sales, they couldn’t fulfill an additional $2.5 billion amid the sudden implementation of the April 9th export rule, and will lose $8 billion in H20 sales in the current quarter.
“The H20 export ban ended our Hopper Data Center business in China,” Huang said. “We cannot reduce Hopper further to comply. As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed. We are exploring limited ways to compete, but Hopper is no longer an option. China’s AI moves on with or without U.S. chips.”
If models like DeepSeek are trained and deployed on U.S.-based platforms, Huang said it strengthens America’s influence at the infrastructure level. To remain competitive, Huang argues, U.S. companies must prioritize collaboration with top-tier global developers, including those from China. Restrictive policies that isolate Chinese developers risk pushing them toward alternative ecosystems, he said.
“When popular models are trained and optimized on U.S. platforms, it drives usage, feedback and continuous improvement,” Huang said. “U.S. platforms must remain the preferred platform for open-source AI. That means supporting collaboration with top developers globally, including in China. America wins when models like DeepSeek and Qwen runs best on American infrastructure.”
Where Huang Says President Trump Has Gotten Things Right
On the other hand, Huang supports President Donald Trump’s rescinding of the Biden-era AI diffusion role and pivot to a new policy that actively promotes the global adoption of U.S.-made AI technologies. Huang said American technology should be at the heart of the move by governments to build sovereign AI platforms, and promoting interoperability rather than protectionism is vital to global influence.
“Countries around the world are awakening to the importance of AI as an infrastructure, not just as a technology of great curiosity and great importance, but infrastructure for their industries and start-ups and society,” Huang said. “Just as they had to build out infrastructure for electricity and Internet, you got to build out an infrastructure for AI. That’s an awakening, and that creates a lot of opportunity.”
Huang also expressed strong alignment with President Trump’s manufacturing vision, emphasizing Nvidia’s commitment to reshoring advanced chip and supercomputer production to the United States. Nvidia’s goal is to boost self-sufficiency by creating a vertically integrated production pipeline capable of delivering entire AI systems from chip to supercomputer, fully within the U.S., in under a year, he said.
“To encourage and support these investments, we’ve made substantial long-term purchase commitments, a deep investment in America’s AI manufacturing future,” Huang said. “Our goal: from chip to supercomputer, built in America, within a year. No one has produced supercomputers on this scale. Our partners are doing an extraordinary job.”