Nvidia’s China Defeat

By Douglas A. McIntyre Updated Nov 5, 6:50AM EST · Published Nov 4, 9:20AM EST

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Nvidia Corp. (NASDAQ: NVDA) says it has “zeroed out” its revenue forecast for China.
Nvidia is caught in a brutal battle between China and the United States for the upper hand in AI development.

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Nvidia’s China Defeat — © Shutterstock / rafapress

China is in a brutal battle with the United States to gain the upper hand in artificial intelligence (AI) development. Nvidia Corp. (NASDAQ: NVDA | NVDA Price Prediction) has the world’s most advanced chips. Its CEO, Jensen Huang, sees a massive market in China, but the odds of selling the company’s most advanced products there have swung back and forth.

The swing is mostly a trade issue. President Trump recently said China cannot have Nvidia’s top-shelf Blackwell chips. The Chinese can, however, have less powerful Nvidia products. Trump said on “60 Minutes” that the best of the best chips were for American companies so they could keep a strategic advantage. If America wants to be the AI leader worldwide, China cannot have its most important weapon.

In July, U.S. Commerce Secretary Howard Lutnick went as far as to taunt the Chinese. Regarding China he said, “We don’t sell them our best stuff, not our second best stuff, not even our third best.” The Chinese reaction was that they made their own chips and would make them better. And they called his comments “insulting.” The Chinese government said it did not even want its companies to buy Nvidia’s less powerful product, the H20. Regardless of whether it was posturing, suddenly, Nvidia’s prospects fell again.

A recent chapter of the Nvidia China trade was the meeting last week between Trump and Chinese leader Xi Jinping. Maybe Trump would come out of the meeting with a deal for Nvidia to move into China. Then Trump made his “60 Minutes” statement.

One thing Nvidia regularly admits is that China would add billions of dollars to its already skyrocketing revenue. At one point, the forecast was as high as $50 billion. At another, Nvidia said it had “zeroed out” its revenue forecast for the world’s second-largest nation based on gross domestic product.

The trade relationship between China and the U.S. is unstable. Huang is known to be dogged in pursuit of Nvidia’s goals and has a relationship with Trump. For now, however, it looks like Nvidia’s big chance of revenue from China is over.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.