Nvidia to Resume Some China Sales but Faces Market Share Erosion

Nvidia (NVDA, Financials) will be allowed to sell its H20 chips to China again, a partial rollback of U.S. export restrictions that cut off the market in April. The Trump administration's move is a relief for Nvidia, which had warned of multibillion?dollar revenue losses, but analysts say the company may not regain its old dominance.

Bernstein projects Nvidia's share of China's AI chip market will slide to 54% in 2025, down from 66% last year, as Chinese chipmakers have seized the opportunity to build market share. Huawei, Cambricon, and Hygon are leading the push, aided by Beijing's drive for chip self?sufficiency.

Beijing's Cyberspace Administration recently summoned Nvidia over national security concerns, including fears of backdoors in H20 chips claims Nvidia denies. The scrutiny, paired with possible new U.S. rules requiring security features in advanced AI chips, could slow adoption.

While Chinese AI developers may welcome renewed access to Nvidia's chips, analysts say Beijing is unlikely to ease pressure on companies to adopt domestic AI infrastructure. The dynamic leaves Nvidia navigating both geopolitical tension and an increasingly competitive China market.