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

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Rich Duprey

Tue, May 19, 2026 astatine 9:02 AM CDT 5 min read

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Nvidia (NVDA) saw China gross illness from 20% of information halfway income to debased azygous digits aft U.S. export restrictions connected precocious AI chips opening successful 2022, portion the company’s wide gross surged 126% successful fiscal 2024 to $60.9 cardinal driven by request from U.S. hyperscalers similar Microsoft (MSFT), Amazon (AMZN), and Meta (META). Huawei Technologies emerged arsenic the biggest beneficiary of the restrictions, with its Ascend AI chips powering home workloads arsenic China’s AI spot self-sufficiency ratio reached 41% this twelvemonth and is expected to deed 85% by 2028.
Washington’s export controls intended to dilatory China’s technological advancement alternatively accelerated its semiconductor independence, leaving Nvidia with permanently reduced leverage successful a marketplace that tin present root 70-85% of AI spot request domestically.
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For years, Nvidia (NASDAQ:NVDA) treated China arsenic 1 of its astir important maturation engines. At 1 point, the state accounted for astir 20% of Nvidia’s information halfway revenue. Then geopolitics stepped in.

First nether the Biden administration, and aboriginal nether President Trump, Washington tightened restrictions connected exporting precocious AI chips to China. The extremity was straightforward: dilatory China’s technological progress. But the argumentation appears to person achieved the other result. That’s the question investors present request to wrestle with aft China erstwhile again seems to person unopen the doorway again connected renewed Nvidia spot sales.

Nvidia’s China Business Went From Boom to Bust

The deterioration happened fast. Beginning successful 2022, the Biden medication imposed export controls connected precocious semiconductors and AI accelerators, including Nvidia’s A100 and H100 GPUs. Those restrictions expanded implicit clip to see modified chips Nvidia specifically designed for China, specified arsenic the H800.

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By aboriginal 2025, Nvidia’s China concern had mostly dried up. CEO Jensen Huang said successful anterior net discussions that China gross had fallen to debased azygous digits arsenic a percent of full sales. That is simply a stunning reversal for a marketplace that erstwhile represented billions successful yearly demand.

Meanwhile, Nvidia’s wide concern kept expanding due to the fact that AI spending exploded elsewhere. Revenue surged 126% successful fiscal 2024 to $60.9 billion, past climbed different 134% done fiscal 2025’s archetypal 9 months. That maturation masked the spread China near behind.

Still, investors shouldn’t underestimate the semipermanent strategical loss. China remains the world’s second-largest system and 1 of the largest AI infrastructure markets connected the planet.

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