Jensen Huang, co-founder and CEO of Nvidia Corp., speaks during a news conference in Taipei on May 21, 2025. Cheng / AFP) (Photo by I-HWA CHENG/AFP via Getty Images)
I-hwa Cheng | Afp | Getty Images
As pleased as Wall Street was with Nvidia’s quarterly results on Wednesday, CEO Jensen Huang said the company is leaving billions of dollars in revenue on the table because it can no longer sell to China.
“The $50 billion China market is effectively closed to U.S. industry,” Huang told analysts at the beginning of his prepared remarks on the earnings call. “As a result, we are taking a multibillion-dollar writeoff on inventory that cannot be sold or repurposed.”
Even without access to the world’s second-biggest economy, Nvidia reported 69% year-over-year revenue growth to $44 billion in the fiscal first quarter, topping analysts’ estimates. The stock rose about 4% in extended trading to a level that would be the highest since January if it stays there on Thursday.
Nvidia shares are now up for the year, after a difficult start to 2025, adding to a rally that lifted the company’s market cap by almost 240% in 2023 and over 170% last year.
Still, Huang is making his displeasure with the China situation quite clear.
In April, the Trump administration told Nvidia that its previously approved H20 processor for China would require an export license, which effectively cut off sales with “no grace period,” the company said on Wednesday. The U.S. government has highlighted the national security concerns of having Nvidia’s sophisticated AI chips sold to a chief adversary.
The H20 was introduced by Nvidia after the Biden administration restricted AI chip exports in 2022. It’s a slowed-down version intended to comply with U.S. export controls.
Nvidia said on Wednesday that sales in the latest quarter would have been $2.5 billion higher if the company could have sold H20 chips for the full quarter, instead of stopping in April when it got the government letter. It had to write off $4.5 billion in inventory it couldn’t use anymore.
In the current quarter, Nvidia said it had $8 billion in planned H20 orders that now have to be scrapped. Nvidia’s guidance is for $45 billion in the current period, a number that would’ve been roughly 18% higher if not for the restriction.
In Huang’s view, the export controls not only hurt Nvidia, but the whole of the U.S. He said China will “move on” with or without Nvidia’s chips, and that Chinese AI researchers will turn to homegrown chips and technology from companies including Huawei.
“The U.S. has based its policy on the assumption that China cannot make AI chips,” Huang said. “That assumption was always questionable, and now it’s clearly wrong.”
“The question is not whether China will have AI,” Huang added. “It already does.”
While Huang has become increasingly public in his disagreements with the export control policy, he’s very careful not to criticize President Donald Trump, who has made a habit out of making life difficult for companies and individuals that openly oppose him.
Huang thanked Trump for rescinding the pending “AI diffusion” rule that would have put AI chip quotas on most countries, and praised him for helping strike deals with Saudi Arabia and the United Arab Emirates to build massive data centers in the Middle East. He said Nvidia was building its latest chips and systems on U.S. soil, a nod to Trump’s plan to bring high-tech manufacturing stateside.
“We share this vision” of highly automated manufacturing with Trump, Huang said.
But Huang admitted that Nvidia doesn’t have another answer to the China issue.
When asked on Wednesday if the company is working on a new China-focused chip to sell into the region or if Nvidia expected to get any relief from the administration, Huang said there’s no replacement product at the moment, and that the latest U.S. limits are “quite stringent.”
“The president has a plan,” Huang said. “He has a vision, and I trust him.”
