Can Nvidia Really Reboot China Sales With Its H200 Export Pivot? 3 Red Flags Wall Street May Be Missing

• Nvidia’s China revenue has steadily collapsed—from 26% in 2021 to under 8% so far this year—showing limited traction even with prior “China-safe” chips.
• Beijing remains wary, reportedly steering state entities away from Nvidia hardware.
• Domestic rivals like Cambricon, Moore Threads, Huawei, Alibaba, and Baidu are emerging as a serious threat to Nvidia in the local market.

Nvidia has been caught in the crossfire of the geopolitical tensions simmering between the U.S. and China, with President Donald Trump and his Chinese counterpart, Xi Jinping, spearheading this AI battle. 

Nvidia’s stock climbed 3% at one point in Monday’s session as traders turned euphoric amid rumors that the U.S. will let the company export its H200 artificial intelligence chip to China. Is the investor optimism justified?

President Donald Trump has since confirmed it on his social media. “I have informed President Xi, of China, that the United States will allow NVIDIA to ship its H200 products to approved customers in China, and other Countries, under conditions that allow for continued strong National Security.”

China’s contribution to Nvidia’s total revenue has continued to shrink amid U.S. restrictions on exporting the company’s high-performance AI chips to the country. On Nvidia’s third-quarter earnings call, CFO Colette Kress said the China-specific H20 chips generated only about $50 million — a negligible sum compared with Nvidia’s $57 billion in revenue over the first three quarters.

Nvidia's Dwindling China Revenue Share

1. Will Older Generation Chip Find Takers?

The U.S. nod is for an older-generation AI chip launched in 2024, and Nvidia has since then launched the B200, B200A and Blackwell Ultra accelerators, based on the Blackwell architecture. It is on track to launch its next-gen Rubin architecture in 2026.

When China locks horns with the U.S. in a closely fought AI race, it is less likely that the customers will remain loyal to Nvidia and remain content with the second-best available to them. It is worth noting that the China-specific H2O chip that Nvidia began selling in the country in late 2023, to circumvent the previous Biden administration’s ban, did little to accelerate Nvidia’s sagging sales.

According to a report from the Institute for Progress (IFP), Hopper also uses TSMC’s 4-nanometer processor node technology, like the Blackwell chips. “As of December 2025, 18 of the 20 most powerful publicly documented GPU clusters in the world primarily used Hopper chips, including all of the top 7,” it said.

2. China’s Rebuff

Not long after Trump flaunted his magnanimity by allowing H200 exports to China, the Asian nation reportedly reiterated what it has been saying for some time now. According to a Financial Times report, citing sources, Beijing is mulling ways to allow limited access to the H1200 chips. Local media reports have, on and off, suggested that China has asked state enterprises and government establishments to avoid Nvidia chips, citing security concerns. This is despite Trump stating in his post that Xi had responded positively to the development.

3. Local Competition Catching Up

Anticipating a supply risk, China has been doling out incentives and funding to homegrown chipmakers to spur domestic innovation. Cambricon, a Chinese AI startup, is widely considered a Nvidia killer in the domestic market. Moore Threads, another startup founded by former Nvidia executive Zhang Jianzhong and a manufacturer of AI chips for training, had a rip-roaring public debut last week. Other big tech players, such as Alibaba and Baidu, also have in-house AI chips that they use to train their own models and supply to other customers.

IFP, however, has shrugged off the China competition in its report. The think tank stated that Huawei, which now has the most advanced AI chip in China, can’t produce one of comparable calibre to the H200 at least until the fourth quarter of 2027. The report also downplayed China’s scaling ability, stating that the country can achieve only 1%-4% of U.S. production in 2025, and 1-2% in 2026.

More importantly, Nvidia now has to make a 25% cut to the government out of its future AI chip sales to China. For a company that makes about $100 billion in trailing 12-month profits and strong margins, the revenue sharing with the government could not matter much. The company may view it as a small cost to make substantial inroads into a hot AI market.

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