Rival AI companies from China have become notable competitors, as per Nvidia's CEO's assessment.
Nvidia Warns of $8 Billion Loss Due to China Export Restrictions
WASHINGTON – Nvidia Corporation's CEO, Jensen Huang, has announced that the departure of U.S. companies from the Chinese AI market has allowed Chinese rivals to fill the gap and improve their technology. Huang made the comments during an interview with Bloomberg Television on May 28, 2025.
"The Chinese competitors have evolved," Huang said. "Huawei Technologies, a Chinese company blacklisted by the U.S. government, has become 'quite formidable'," he added.
Nvidia is experiencing a significant financial impact due to U.S. restrictions on exports to China. These restrictions have effectively locked the company out of the world's largest chip market, leading to a projected loss of $8 billion in sales this quarter. The company incurred a $4.5 billion charge in the first quarter of 2025 due to the excess H20 inventory that could not be sold or repurposed because of the export restrictions.
During a quarterly earnings call on May 28, Huang spent a considerable amount of time urging the American government to ease these curbs. He argued that keeping AI technology out of Chinese hands is not effective, as local companies are simply finding alternatives. Key purchasers of Nvidia's products, such as Tencent Holdings, have turned to Huawei because they can no longer rely on U.S. suppliers.
Huang cautioned that the gap between U.S. products and Chinese alternatives is decreasing. Huawei's latest AI chip is reportedly similar in performance to Nvidia's own H200, a formerly state-of-the-art component. Under new rules, Nvidia is unable to even ship its H20 chip to China, a downgraded version of the H200.
Regarding the impact of the U.S. revoking some Chinese student visas, Huang, who was born in Taiwan, said he believes the administration still values immigration. "I'm an immigrant. I know many immigrants that came to the US to build a great life, and many of us have contributed greatly to the technology industry in the US," Huang said.
In conclusion, while Nvidia faces significant challenges due to export restrictions, Chinese AI competitors are leveraging these restrictions to accelerate their development and market presence. The impact on Nvidia has been substantial, with a projected loss of $8 billion in sales this quarter alone. The broader implications of these developments raise questions about the future AI landscape and which technology stack will dominate.
"Nvidia's CEO, Jensen Huang, in his comments during an interview with Bloomberg Television on May 28, 2025, indicated that Chinese AI competitors, such as Huawei Technologies, have improved their artificial-intelligence technology due to the departure of U.S. companies from the Chinese AI market. Moreover, during a quarterly earnings call on the same day, Huang emphasized that new developments in Chinese AI, like Huawei's latest AI chip, are closing the gap with Nvidia's technology, specifically their H200 component."
