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

Rich Duprey

Tue, May 19, 2026 at 10:02 AM EDT 5 min read

Quick Read

• Nvidia (NVDA) saw China revenue collapse from 20% of data center sales to low single digits after U.S. export restrictions on advanced AI chips beginning in 2022, while the company’s overall revenue surged 126% in fiscal 2024 to $60.9 billion driven by demand from U.S. hyperscalers like Microsoft (MSFT), Amazon (AMZN), and Meta (META). Huawei Technologies emerged as the biggest beneficiary of the restrictions, with its Ascend AI chips powering domestic workloads as China’s AI chip self-sufficiency ratio reached 41% this year and is expected to hit 85% by 2028.

• Washington’s export controls intended to slow China’s technological progress instead accelerated its semiconductor independence, leaving Nvidia with permanently reduced leverage in a market that can now source 70-85% of AI chip demand domestically.

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For years, Nvidia (NASDAQ:NVDA) treated China as one of its most important growth engines. At one point, the country accounted for roughly 20% of Nvidia’s data center revenue. Then geopolitics stepped in.

First under the Biden administration, and later under President Trump, Washington tightened restrictions on exporting advanced AI chips to China. The goal was straightforward: slow China’s technological progress. But the policy appears to have achieved the opposite result. That’s the question investors now need to wrestle with after China once again seems to have shut the door again on renewed Nvidia chip sales.

Nvidia’s China Business Went From Boom to Bust

The deterioration happened fast. Beginning in 2022, the Biden administration imposed export controls on advanced semiconductors and AI accelerators, including Nvidia’s A100 and H100 GPUs. Those restrictions expanded over time to include modified chips Nvidia specifically designed for China, such as the H800.

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By early 2025, Nvidia’s China business had largely dried up. CEO Jensen Huang said in prior earnings discussions that China revenue had fallen to low single digits as a percentage of total sales. That is a stunning reversal for a market that once represented billions in annual demand.

Meanwhile, Nvidia’s overall business kept expanding because AI spending exploded elsewhere. Revenue surged 126% in fiscal 2024 to $60.9 billion, then climbed another 134% through fiscal 2025’s first nine months. That growth masked the hole China left behind.

Still, investors shouldn’t underestimate the long-term strategic loss. China remains the world’s second-largest economy and one of the largest AI infrastructure markets on the planet.