Nvidia (NVDA) CEO Jensen Huang said it would be “foolish to underestimate the might of China and the competitive spirit of Huawei.” His comment came as Nvidia’s market share in China dropped from 95% to 0% after U.S. export limits blocked sales of its top AI chips. The company once led the Chinese market but now has no direct sales there.
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However, Huang said Huawei Technologies continues to grow fast in AI hardware. He pointed to Huawei’s strength in 5G and chip design, noting that the company builds “amazing systems.” Huawei’s newest CloudMatrix AI computer uses 384 of its Ascend 910C chips and claims a speed of 300 petaFLOPs. That figure is more than double the output of Nvidia’s GB200 NVL72 supercomputer.
Nevertheless, Nvidia remains the global leader in AI chips, thanks to its software tools and broad user base. Yet the CEO said that cutting off China also hurts U.S. firms, since many AI developers are based there. He warned that “forfeiting half the world’s developers” could slow innovation and limit market reach over time.
Meanwhile, NVDA shares are climbing in pre-market today, rising 2.53% at the time of writing.
China’s Chip Push Accelerates
China has made chip independence a top priority. The country’s AI chipmakers are gaining both funding and scale. Analysts expect that by the end of 2025, about 40% of AI server chips used in China will be made domestically. The move is meant to reduce reliance on Nvidia and other U.S. suppliers.
Huawei leads the push, but other local players like Cambricon Technologies are also growing fast. Cambricon’s revenue rose 43 times to $404 million in the first half of 2025 after winning major orders from local firms. These gains show how the U.S. export rules have fueled a homegrown chip industry instead of stopping it.
Meanwhile, President Donald Trump said he did not discuss lifting the chip ban with Chinese President Xi Jinping during recent talks. He told reporters, “We’re not talking about the Blackwell,” referring to Nvidia’s latest AI chip. The statement suggests the restrictions are likely to stay in place for now.
Even so, Chinese tech firms are adjusting. Alibaba Group (BABA) is developing AI systems that use up to 82% fewer GPUs to train models. As these companies adapt, China’s domestic AI sector is moving toward self-reliance.
The Bigger Picture
Huang said China’s AI chip market could reach $50 billion this year and grow much larger by decade’s end. Despite U.S. export limits, that expansion signals strong long-term demand for AI computing.
For investors, Nvidia’s global position stays strong, but the loss of China marks a major gap in future growth. At the same time, Huawei and its local peers are building full AI systems without U.S. parts. The split could shape two separate chip ecosystems over the next few years, each advancing on its own track.
Is Nvidia Stock a Buy?
Nvidia continues to hold the Street’s endorsement with a Strong Buy consensus rating. The average NVDA price target is $237.14, implying a 17.11% upside from the current price.
