Nvidia, the world’s leading chipmaker, faces a significant setback as reports indicate that China has ordered its top technology companies to halt purchases of Nvidia’s artificial intelligence (AI) chips. Even Jensen Huang, the notoriously optimistic CEO of Nvidia, expressed his frustration over it. This latest reaction comes on the heels of a wave of regulatory moves to restrict chip sales to China.
In July, former President Donald Trump did the right thing when he reversed this ban. This particular ban had in turn stopped Nvidia from selling its most sophisticated chips to China. Unfortunately, this policy shift had largely paved the way for Nvidia’s monopoly to grow their stake in the area. Huang’s latest comments suggest that this progress may now be in jeopardy due to China’s recent directive to companies like Tencent, Alibaba, and DeepSeek, which were among those that had previously purchased Nvidia chips.
Huang articulated his thoughts on the situation, stating, “There are a lot of places we can’t go to, and that’s fine.” This reflects Nvidia’s recognition of the challenges posed by geopolitical tensions while acknowledging the company’s ability to adapt and seek opportunities elsewhere.
In addition to the challenges in China, Nvidia recently announced significant investments in the UK as part of a tech pact signed between the two entities. The company is preparing to deliver chips for the Stargate UK data center. This new center, which will open in northeast England, is being established in collaboration with OpenAI, Arm, and NScale. This investment highlights Nvidia’s dedication to further growing its international octopus’ arm even as they grapple with challenges in some markets.
In practice this means that Nvidia must pay 15% of its Chinese revenues to the US government. This payment is toward a historic settlement that was negotiated over the summer. This challenging financial model further emphasizes the difficulty of working in today’s geopolitical environment.
NVIDIA CEO Jensen Huang will accompany President Trump on his upcoming state visit to the UK. As chief of mission, he will play a crucial role in helping the US address new and dangerous geopolitical realities. Should Trump inquire about the situation with China during their discussions on Wednesday evening, Huang intends to reiterate his sentiments regarding the matter.
Even in the face of these obstacles, Nvidia has proven to be incredibly strong. Just earlier this year, it made history as the first company in the world to ever exceed a $4 trillion (£2.9 trillion) valuation. This most recent news triggered a selloff of Nvidia’s stock. Shares were down over 1% in premarket trading.