Trump's 25% cut on Nvidia chips sold to China backfired — Beijing won't approve a single H200 purchase, costs Huang $30B
Yahoo News
Last updated: May 26, 2026
China has strategically decided to reduce its reliance on U.S. AI chip imports, particularly from Nvidia, and is actively promoting its domestic semiconductor industry. This shift is driven by national security concerns, a desire for technological independence, and a potential revenue-sharing dispute with the U.S.
- Nvidia's H200 AI chips have seen no shipments to Chinese buyers, despite prior orders and U.S. Commerce Department approvals for some Chinese firms to purchase them. Beijing has steered domestic companies away from these purchases.
- Chinese firms like DeepSeek and ByteDance are prioritizing domestic chipmakers, including Huawei, and increasing investment in their own AI capabilities. Huawei's Ascend chips are seeing increased demand and price hikes.
- A U.S. regulation requiring chips to physically pass through U.S. territory before re-export to China, allowing the Treasury to collect a 25% fee, has reportedly caused unease in China due to concerns about tampering and hidden vulnerabilities.
- Nvidia's CEO, Jensen Huang, has acknowledged the company's market share in China is now effectively zero and expects no data center compute revenue from the region. This represents a significant shift from its previous reliance on the Chinese market.
- Despite the challenges in China, Nvidia continues to experience strong revenue growth globally, driven by demand from hyperscalers and sovereign AI deals in other regions.
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