Nvidia concedes China to Huawei

Nvidia CEO Jensen Huang said this week that the U.S. chipmaker has “largely conceded” China’s advanced AI-chip market to Huawei, a public acknowledgment of how U.S. export controls have redrawn one of the industry’s biggest battlegrounds. Huang made the remark after Nvidia reported quarterly results and as Washington’s licensing rules and Beijing’s own restrictions continued to limit what the company can ship into China. China has also banned imports of some Nvidia chips, Semafor reported on May 22. In Taiwan, prosecutors said they had raided 12 locations in a probe into alleged smuggling of Nvidia AI servers to China. ### What exactly did Jensen Huang concede? CNBC reported on May 21 that Huang said Nvidia had “really largely conceded” China’s AI-chip market to Huawei. He said “the demand in China is quite large” and called Huawei “very, very strong,” adding that Chinese chip companies were doing well “because we’ve evacuated that market.” (cnbc.com) Nvidia’s retreat follows years of tightening U.S. controls on advanced AI processors for China. CNBC said the Chinese market once accounted for at least one-fifth of Nvidia’s data-center revenue, but the company has effectively been shut out after the Trump administration told Nvidia in April that it would need a license to export chips to China and several other countries. (cnbc.com) ### Why is Beijing also blocking some Nvidia chips? Semafor reported on May 22 that China banned imports of some Nvidia chips, a move it said underscored Beijing’s push to build domestic advanced-semiconductor capacity in the AI race with the United States. The report said the decision was a blow to Nvidia, whose chief executive had lobbied Washington to ease export restrictions on China-bound chips. (cnbc.com) Reuters reported on May 23 that Nvidia has received U.S. licenses to sell H200 chips to China, but has not received approval from Chinese officials. Huang said at Taipei’s Songshan airport that “H200 has been licensed to ship to China” and that the Chinese market remains “very important” and “very large.” Reuters also said no deliveries had yet been made. (semafor.com) ### What do the trade numbers show? Benzinga reported on May 22 that China’s semiconductor exports doubled in April to $31 billion, citing rising AI demand and the effect of U.S. restrictions in pushing buyers toward domestic production. That figure has been cited by market commentators as evidence that controls are coinciding with a faster build-out of Chinese supply. (money.usnews.com) Reuters reported on May 23 that Huang still includes China in Nvidia’s forecast for a $200 billion CPU market. Asked whether that forecast included China, he replied: “I would think so.” The comment showed Nvidia is still counting long-term Chinese demand even as current AI-chip sales remain constrained. (benzinga.com) ### What is Taiwan investigating? Keelung prosecutors said on May 22 they were seeking to detain three people accused of forging documents to export Nvidia AI servers to China, in what Taipei Times described as Taiwan’s first crackdown on semiconductor smuggling. The office said it executed search warrants at 12 locations on Wednesday, including residences, and questioned the suspects and witnesses. (money.usnews.com) The case involves servers made by Super Micro Computer, according to prosecutors cited by Taipei Times. The suspects are accused of filing false declarations so the systems could be shipped to China, Hong Kong and Macau in violation of U.S. trade rules. ### Are customers already looking beyond Nvidia? The Information reported on May 22 that Anthropic is in talks to rent servers powered by Microsoft’s Maia chips as it seeks more computing capacity for Claude. (taipeitimes.com) The report points to a broader search for alternatives as access to Nvidia hardware remains constrained and demand for AI compute stays high. On May 23, Huang said in Taipei that he would meet with TSMC while in Taiwan ahead of Computex next month. Nvidia’s next public marker on China will be whether any licensed H200 shipments are actually delivered and whether Beijing clears those imports. (money.usnews.com) (theinformation.com)