China to Open Market to US-Built AI Chips
Nvidia CEO Cautiously Optimistic on China AI Chip Sales
Nvidia Corp. Chief Executive Officer Jensen Huang expressed optimism about the potential for Chinese authorities to allow the import of artificial intelligence chips from the US, speaking days after he joined President Donald Trump's summit in China.
According to reports, Huang's presence on the trip stirred speculation among investors and China hawks in Washington that Nvidia might achieve a breakthrough on shipping AI chips to the world's second-largest economy. Huang acknowledged that the topic of Nvidia's H200 AI chips came up during discussions between officials from both sides, but he didn't discuss directly with Chinese officials the company's effort to sell its H200 AI chips to customers in China.
On Friday, after his return to Washington, Trump said that Nvidia's H200 chips "did come up, and I think something could happen on that," without elaborating further. The president added that China hasn't approved purchases of the H200 chips "because they chose not to, they want to develop their own."
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
The US Commerce Department has granted licenses to clear the way for Nvidia to ship its H200 AI chips to Chinese customers, a decision that marked a significant easing of measures aimed at restraining China's growth in AI. However, officials in Beijing have held up purchases by companies in China, owing in part to their desire to achieve self-sufficiency in semiconductors and boost domestic champions like Huawei Technologies Co.
Huang has previously identified China as a $50 billion opportunity for Nvidia, though the company earlier this year maintained its projection of zero sales for AI chips in the Chinese market. Nvidia reports its results on Wednesday, when investors will be looking for an update on the prospects for AI chip shipments to China.
| Quarter/Year | Nvidia AI Chip Sales in China | US Clearance for Shipments | H200 Production Status |
|---|---|---|---|
| Q1 2023 | $0 | Granted | Preparing to fire up production |
| Q2 2023 | $0 | Granted | Not specified |
| Q3 2023 | Not specified | Granted | Not specified |
| December 2023 | Not specified | Granted | Not specified |
Investors will be looking for an update on the prospects for AI chip shipments to China after Nvidia reports its results on Wednesday.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Investor Takeaway
Investors may see opportunities for Nvidia in the Chinese market as the government considers opening up to US-built AI chips.
More in Market
Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Indian Stocks to Watch: BHEL, Agarwal Industrial, JBM Auto, Rajesh Exports, Indian Energy Exchange, Lenskart Solutions in Market Focus on June 4.
