Without a real impact on short -term growth of the American graphics cards, its exclusion from the Chinese market is likely to promote the emergence of a rival ecosystem on AI fleas.
Is there anything that can slow the progress of Nvidia? Taking advantage of the assessment of its price on the stock market, Jensen Huang sold in June part of his shares, which, during the current course, should allow him to pocket the coquette sum of $ 900 million. Almost a trifle for the boss and founder of the company, whose fortune is estimated at $ 138 billion…
Other investors from the start also took advantage of the stock market embellish to resell some of their shares, pocketing a nice added value. The company is now the second best -valued company in the world, behind Microsoft and Apple. A great success since its creation thirty years earlier by Jensen Huang in a Denny’s, an American fast food chain.
At the end of May, Nvidia announced excellent quarterly results. Despite the turbulence caused by the Trump administration foreign policy, the company continues to display very good performance: its turnover reached $ 46.06 billion in the last quarter, up 69% of one year on the other.
Performance is all the more remarkable since many observers expected a backlash linked to the retaliatory measures adopted by Donald Trump against China. In mid-April, he prohibited Nvidia from exporting his H20 chips there, a bridled version of the most powerful processors in the company. However, these had been designed specifically for the Chinese market, following a first ban on the Biden administration targeting the most advanced chips of Nvidia in 2022. Joe Biden and Donald Trump share the same objective in this regard: braking the technological advance of China, and too bad if Nvidia makes the price.
A real financial loss, but far from being insurmountable
The boss of Nvidia, who does not miss an opportunity to brush Trump in the direction of the hair, publicly deplored the impact that this policy had on his business. “China represents a huge market in AI, which will probably reach $ 50 billion within two to three years. It would be a huge loss of not being able to satisfy this market as an American company, and thus generate turnover, tax income and jobs in the United States,” he said in a recent interview.
According to NVIDIA, the export ban from the H20 chip to China has generated $ 4.5 billion in inventories that cannot be sold, and a loss of $ 10.5 billion in turnover. A shortfall that could have had another business wavering, but which, given the size, the growth trajectory and the ultra-dominant position of Nvidia on the Premium Puces Market, ultimately did not shake its results.
“China is actually no longer a very large market for Nvidia. From 20 to 25% of its turnover on data centers (Division in which high -end AI chips are included, editor’s note) Initially, China represented only 10 to 15% following the first wave of restrictions under the administration of Joe Biden in 2022. It is not nothing, but when we know that Nvidia is 15% of sequential growth each quarter outside China, we see that it does not represent a real challenge for the economic results of the short -term company. Especially since his rivals, like AMD, also underwent inventory losses following the latest restrictions from the Trump administration, “said Antoine Chkaiban, consultant at New Street Research, a market intelligence cabinet.
The dangerous emergence of a rival ecosystem
In the longer term, on the other hand, such as the Jensen Huang sketch himself, the exclusion of Nvidia from the Chinese market represents a strategic challenge for the company. It intends to become the default ecosystem on AI fleas, a hegemonic position that it has de facto reached today. However, depriving the Chinese companies of Nvidia fleas will certainly slow their advance technology, but also promoting the emergence of a rival ecosystem in the Middle Kingdom, which is already embodying the Huawei giant. Ultimately, the latter risks representing a serious competitor for Nvidia, likely to delight it market share not only in China, but also in other markets.
We are certainly not there yet, and Huawei still has a lot of work to catch up on Nvidia. “Huawei still has concerns to produce its Ascend chips, in particular because Smic, the company that makes them, does not have access to the most advanced ASML machines,” notes Antoine Chkaiban. Since 2019, the Dutch company has had to stop exporting its most sophisticated extreme ultraviolet radiation machines to China, which are necessary for the most fine engravings (two and three nanometers). A decision imposed by the Dutch government, itself put under pressure by the Trump administration, which was already trying to curb the advance of China.
Thus, “Huawei must for the time being satisfied with chips of seven nanometers, which it also has trouble producing large volumes: the objective of 500,000 fleas that the company had set itself last year was not achieved”, according to the expert. However, underestimating the Chinese giant would be a serious mistake. This has already progressed faster than most market experts anticipated, and has several advantages to continue to move forward despite Western attempts to put sticks on the wheels.
“China has an abundant access to energy. Even if Huawei must use four times more chips to compensate for a lower engraving, it can do so, and thus gain power, experience and start developing a competitive rival ecosystem. This will not be done right away, we speak of a horizon of at least ten years, but ultimately, it is a threat to Nvidia,” said Antoine Chkaiban.
Walk the line
This is why, despite the camouflet inflicted in mid-April by Donald Trump, and of the small importance that this market now represents for its turnover, Nvidia has no intention of drawing a definitive cross on the Middle Kingdom. Barely his prohibited H20 chip, Jensen Huang is already preparing the launch of a new model, even less powerful, dedicated exclusively to the Chinese market, and which should be launched in July. Unlike the H20 chip, it would not use Hopper architecture, the most advanced of Nvidia.
Nvidia plays a very tight part here: on the one hand, his chip must be sufficiently restrained to receive the Trump administration stamp-contacted on this point, a company spokesperson says that discussions are underway with the White House to find a satisfactory solution. On the other hand, Nvidia must offer a chip that is sufficiently competitive compared to those of Huawei to orient Chinese companies towards its offer. A very delicate balance to find which undoubtedly constitutes a puzzle for Jensen Huang. But if this bet allows it to avoid or at least slow down the emergence of a rival ecosystem in the second world economy, the game will largely earn the candle.
