Nvidia Concedes China's AI Chip Market to Huawei as Export Curbs Bite

A Stunning Admission from the King of AI Chips

Nvidia CEO Jensen Huang has acknowledged what industry watchers have suspected for months: the world's most valuable chipmaker has effectively surrendered the Chinese artificial intelligence chip market to domestic rival Huawei. Speaking on the back of Nvidia's record first-quarter fiscal 2027 results, Huang told CNBC that Huawei 'had a record year' and is poised for 'an extraordinary year coming up'. He went further, telling a policy group earlier in the month that Nvidia's share of the Chinese market had 'dropped to zero'.

Record Revenues, Zero China

The concession is all the more striking given Nvidia's broader trajectory. The company posted $81.6 billion in revenue for the quarter, up 20% sequentially, and has forecast $91 billion for the current quarter. None of that growth depends on China. Nvidia has continued to exclude Chinese revenue from its financial outlook, and Huang has told investors to 'expect nothing' when it comes to approvals to restart advanced chip sales into the country.

Approvals Granted, Deliveries Stalled

The situation is layered with policy contradictions. Roughly ten Chinese firms, including major cloud and e-commerce players, have received U.S. Commerce Department authorisation to purchase Nvidia's H200 chips. Yet no deliveries have actually taken place. Commerce Secretary Howard Lutnick told a Senate hearing that Beijing has not permitted Chinese firms to complete the purchases, as the government pushes domestic alternatives. Beijing has reportedly signalled that any H200 buy may need to be paired with purchases of homegrown silicon. Nvidia, meanwhile, halted H200 production in March, redirecting fab capacity toward its next-generation Vera Rubin platform.

Policy Whiplash

U.S. semiconductor policy toward China has whipsawed repeatedly. After approvals were codified earlier this year with a 25% tariff, volume caps, and end-use certification, bipartisan legislation has since been proposed to hand Congress veto power over chip exports to adversarial nations. The uncertainty has only accelerated Chinese self-reliance.

Huawei's Quiet Conquest

While the policy debate has churned, Huawei has steadily consolidated its position. Morgan Stanley projects Huawei could hold 60% of China's AI chip market by the end of 2026. Chinese hyperscalers are doubling down on domestic silicon for new data centre buildouts, a structural shift that may be difficult to reverse even if export controls were lifted tomorrow. Huang's own assessment was characteristically blunt: 'Huawei is very, very strong.' For the company that defined the modern AI boom, conceding the world's second-largest economy marks a remarkable strategic retreat, and a reminder that even market leaders cannot defy geopolitics indefinitely.