China remains strategic variable

Nvidia’s position in China is no longer a simple question of whether Washington allows shipments. Reuters reported on May 14 that the United States had cleared about 10 Chinese companies to buy Nvidia’s H200 chips, but no deliveries had been made, leaving the company’s access to the market unresolved. Chinese technology groups, meanwhile, have spent the past year building around Nvidia’s absence by expanding use of domestic chips, according to company executives cited by CNBC. (usnews.com) (investor.nvidia.com) That combination matters because China was once a much larger part of Nvidia’s business. Reuters reported that Nvidia had previously held about 95% of China’s advanced chip market before tighter U.S. curbs, and said China once accounted for 13% of the company’s revenue. Nvidia said in its fiscal 2025 annual report that data-center revenue in China grew in that year but remained well below levels seen before export controls imposed in October 2023. (usnews.com) ### If Washington approved some sales, why is China still uncertain? (cnbc.com) Reuters reported that the U.S. Commerce Department approved sales of H200 chips to around 10 Chinese companies, including Alibaba, Tencent, ByteDance and JD.com, as well as some distributors such as Lenovo and Foxconn. Each approved customer could buy up to 75,000 chips under the license terms, according to Reuters. (usnews.com) But Reuters also reported that no H200 deliveries had taken place as of May 14. That leaves Nvidia with approvals on paper but without confirmed shipments, installations or revenue from those licenses. (publicnow.com) ### What have Chinese companies done while Nvidia was shut out? Tencent said this week that supply of China-designed GPUs would ramp up through 2026, with Chief Strategy Officer James Mitchell saying availability should increase “month by month,” CNBC reported. Alibaba said its T-Head proprietary GPU chips had reached scaled mass production and described those chips as an advantage in a period of restricted access to foreign semiconductors. (usnews.com) CNBC said companies including Huawei, Moore Threads and MetaX have tried to fill the gap left by Nvidia’s restrictions-era absence. The report said Nvidia’s exclusion had helped fuel a homegrown chip boom in China. (usnews.com) ### Why does recovered access not automatically restore Nvidia’s old position? Nvidia’s own filings show the reset is not just political but commercial. The company said its China data-center revenue in fiscal 2025 stayed well below pre-October 2023 levels even though it grew year over year. Paul Triolo of DGA-Albright Stonebridge Group told CNBC, as quoted by Benzinga, that H200 still fits Chinese demand for inference and industrial AI workloads, but he also said China has lost little time in backing domestic alternatives led by Huawei and other local suppliers. (cnbc.com) Benzinga reported that Triolo said Nvidia had lost most of the roughly 95% share it once held in China’s data-center GPU market. ### What should boards watch instead of headline diplomacy? China exposure now sits in several buckets at once: export licensing, customer concentration, local substitution and capital-allocation timing. (publicnow.com) Reuters’ account of approved-but-undelivered H200 sales shows that a favorable diplomatic headline does not necessarily produce shipments. Nvidia’s disclosures point in the same direction. The company’s annual report says China revenue remains below earlier levels, and Chinese buyers are publicly discussing domestic supply plans rather than waiting for a full reopening of foreign chip access. (benzinga.com) ### What is the next concrete checkpoint? May 20 is Nvidia’s next scheduled test. Nvidia’s investor relations site lists first-quarter fiscal 2027 results for May 20, 2026, and the company’s annual meeting for June 24, 2026. Those events are the next formal venues for management to address China demand, licensing progress and any effect on guidance. (investor.nvidia.com) (publicnow.com) (usnews.com)