Even as Nvidia on Wednesday reported another blockbuster quarter of 69 percent sales growth, the artificial intelligence (AI) chip designer warned of more risks to its business emerging in the technology conflict between the US and China.
Tucked into Nvidia’s quarterly filing with US securities regulators, the company for the first time said that restrictions on the use of open-source AI models from China, such as DeepSeek and Qwen, could hurt its business, as could US rules barring connected vehicle technology from China, where Nvidia’s long-struggling auto chip business has finally flourished.
While Nvidia CEO Jensen Huang (黃仁勳) on a conference call with analysts praised US President Donald Trump’s decision to rescind an export rule put in place by former US president Joe Biden that would have regulated the flow of Nvidia’s chips around the world, the company’s quarterly filing showed that no new rule had been issued in its place and that a “replacement rule may impose new restrictions on our products or operations.”
Photo: Chiang Ying-ying, AP
On the other hand, Huang criticized new export curbs imposed by the Trump administration last month. The curbs stop the company from selling its H20 chip made for the Chinese market, which Huang called “a springboard to global success.”
The export limits cost Nvidia US$2.5 billion in sales during its first quarter, and it expects another US$8 billion sales hit in the second quarter.
Sales of the H20 in China earned Nvidia US$4.6 billion in revenue, as customers stockpiled the chips before the curbs set in. The China business accounted for 12.5 percent of overall revenue.
“The question is not whether China will have AI — it already does. The question is whether one of the world’s largest AI markets will run on American platforms,” Huang said, later adding that “AI export controls should strengthen US platforms, not drive half of the world’s AI talent to rivals.”
Huang also said that keeping Chinese open-source models such as DeepSeek and Qwen running on Nvidia chips provides US firms with valuable insight on where the global AI industry is headed.
“US platforms must remain the preferred platform for open-source AI,” he said. “That means supporting collaboration with top developers globally, including in China. America wins when models like DeepSeek and Qwen run best on American infrastructure.”
Despite the curbs, Nvidia forecast second-quarter sales of US$45 billion, plus or minus 2 percent, in the second quarter, only slightly below analysts’ average estimate of US$45.9 billion, data compiled by LSEG showed. That implied growth of about 50 percent from a year earlier.
Executives also highlighted deals worth potentially billions of dollars in the coming months and years in Saudi Arabia, the United Arab Emirates and Taiwan, sending Nvidia shares up after hours and leading analysts to conclude the impact of US-China trade tensions was not as bad as feared.
“Rather than downplay the China hit, [Huang] contextualized it as a known, manageable speed bump in an otherwise hyper-accelerated growth narrative,” Running Point Capital chief investment officer Michael Ashley Schulman said.
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