Nvidia Has 0% Market Share in China According to CEO Jensen Huang
Nvidia is now out of China and is not able to sell its GPUs there as China fights the U.S. in a trade war.
Quick overview
- Nvidia has completely exited the Chinese market, losing its previous 95% market share in AI processing units.
- The company's operations have been severely restricted by U.S. government policies, contributing to its withdrawal from China.
- China is promoting local AI components over foreign products, further complicating Nvidia's ability to compete in the region.
- The ongoing trade war between the U.S. and China poses significant risks to Nvidia's future and American businesses overall.
Nvidia (NVDA) one enjoyed a 95% market share of AI processing units, and now it is completely out of that market, says the company’s CEO Jensen Huang.
Nvidia has its operations restricted by the Biden administration back in 2022, limiting which of its GPUs it could sell to China, which is considered a competitor with the United States in the war for the best technology. The Trump administration repealed some of those restrictions, allowing Nvidia back into China, but the Chinese government is now pushing back.
For months, China has been attempting to move Nvidia out of China. The government there has been encouraging its citizens to buy local AI components rather than outsource them from a foreign seller like Nvidia. However, Nvidia has the best and most powerful processing units on the market for AI operations. And now, Nvidia has been forced out of China completely and owns no share of the market there.
Is Nvidia’s Future in Jeopardy?
Huang says that with the current policies in place that have helped to create a trade war with China, Nvidia is suffering and America is suffering. The current administration’s policies have forced China’s hand, and they have ejected the largest company in the world from their borders. Jensen worries about how that will affect American business.
The trade war between China and the United States explode in recent weeks, with the Chinese government drastically restricting the sale of rare earths, which are used in computer components. The U.S. fired back with a tariff of 100% on Chinese goods. Now, the Chinese government has made things difficult for Nvidia to operate in the country and has been telling regulators to encourage local purchases for AI components.
This means that one of the potentially most lucrative markets for Nvidia is closed off to it, and their bottom line will suffer as a result. During the last few years, Nvidia has been selling its components to China but has had to face steep fines, heavy tariffs, and a serious restriction as to which of its products it can sell there.
China is the second largest computer consumer in the world, right after the United States. If Nvidia is banned from selling there at all, they will have a hard time retaining their crown as the company with the most market cap. This could also be an opportunity for China to keep other foreign computer companies out of the country, hurting sales across the board for American computer businesses.
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