Nvidia CEO Jensen Huang is blunt on China’s artificial intelligence opportunities.
On May 6, he said that China’s AI market will likely reach about $50 billion in the next two to three years and that missing out on it would be a “tremendous loss” for U.S. companies.
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“It’s going to bring back revenues. It’s going to bring back taxes. It’s going to create lots of jobs here in the United States,” Huang said in an interview with CNBC.
“We just have to stay agile,” Huang said. “The world is right now hungry, anxious to engage AI…Let us get the American AI out in front of everybody right now.”
Nvidia (NVDA) is the top supplier of graphics processing units, which are essential to artificial intelligence. The surge in AI demand has fueled massive growth for the company, lifting its market value to nearly 3 trillion dollars.
Its stock climbed 171% last year and rose nearly 239% in 2023, as investors bet on its leading role in the AI boom.
Though Nvidia’s growth remains strong compared to other tech giants, the momentum is slowing. The company expects to bring in roughly $43 billion in first-quarter revenue, which implies a 65% gain year-over-year, down sharply from the 262% growth in the same period a year prior.
Nvidia is set to report first-quarter earnings on May 28.
Nvidia is facing higher export costs.
Image source: Chih/Bloomberg via Getty Images
China AI chip race heats up
In late April, Huang said that China is “not behind” in AI at a tech conference.
“They’re incredible in computing and network technology, all these essential capabilities to advance AI,” Huang said. “They have made enormous progress in the last several years.”
The U.S. has been trying to slow China’s tech innovation by restricting access to advanced technologies through a growing list of export bans. But China is pushing forward, with plans to invest $140 billion (1 trillion yuan) in AI over the next five years.
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“A flurry of impressive Chinese releases suggests the U.S.’s AI lead has shrunk,” TIME’s reporter Harry Booth wrote in January, when Chinese AI developer DeepSeek introduced a large language model that rivals OpenAI, but with much lower cost.
DeepSeek’s launch rattled markets, causing Nvidia shares to tumble amid concerns that China’s less expensive AI models could reduce future demand for its high-end chips.
Nvidia faces higher export costs
In April, Nvidia warned it could face higher costs due to President Donald Trump’s export controls on China.
The AI chipmaker said it would take a $5.5 billion charge to export its H20 graphics processing units to China and other countries. It added that shipping these chips will now require a government license.
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The H20 chip was specifically designed under President Joe Biden’s administration to comply with earlier U.S. export restrictions, which curbed sales of advanced AI processors to China. In 2024, the chip generated sales of approximately $12 billion to $15 billion.
“Whatever the policies are of the government, whatever is in the best interest of our country, we’ll support,” Huang said in the interview.
More Nvidia:
Will Nvidia get hit hard by AI capex risk?Analysts revise Nvidia price target on chip demandSurprising China news sends Nvidia stock tumbling
Nvidia stock is down 15.5% on the year, weighed by disappointing earnings, a broader market pullback amid rising economic uncertainties, and the demand threat from China’s AI model DeepSeek.
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