Nvidia removes China from forecasts due to US export controls

Nvidia removes China from forecasts due to US export controls

Chipmaker Nvidia will exclude the Chinese market from its sales and profit forecasts. The reason for this is the strict US restrictions on the sale of chips to China, as CEO Jensen Huang said on Thursday.

Nvidia's adaptation to market conditions

When asked whether the US would increase export controls according to the trade talks with China in London this week, Huang told CNN: "I don't expect it to happen, but if it happens, it would be a big bonus. I have told all our investors and shareholders that our forecasts will no longer take the Chinese market into account in the future."

US restrictions and their effects

In recent years, Washington has stepped up efforts to limit China's access to American chip technology innovations. The aim is to prevent Beijing from using US innovations to strengthen its military and AI capabilities.

Huang's comments underscore the impact of U.S. chip restrictions on Nvidia, a company once best known for its video game graphics processors but which has benefited enormously from rising demand for AI chips and infrastructure. In the first quarter of 2025, the company beat Wall Street's revenue forecasts, posting a 69% increase compared to the same period last year.

Lost revenue due to export restrictions

However, Nvidia missed out on $2.5 billion in additional revenue because export restrictions prohibited the company from shipping its H20 AI chips to China. This particular chip model was specifically designed to comply with US export controls, but Nvidia was told in April that special authorization was required. The company suffered a smaller-than-expected loss due to excess inventory: it had to write off $4.5 billion, compared to the $5.5 billion it originally expected.

Opinions about export controls

Kevin Hassett, director of the US National Economic Council, told CNBC on Monday that the Trump administration may be open to easing restrictions on some microchip exports that China sees as critical to its manufacturing sector. However, the US will continue to maintain controls on “very, very powerful Nvidia chips” that could power AI systems.

On Thursday, Huang again criticized US export controls. “The objectives of the export controls are not being achieved,” he told CNN. "Whatever the objectives initially discussed, they clearly do not seem to be working. Therefore, I think that for all export controls the objectives need to be clearly stated and tested over a longer period of time."

Nvidia's role in technology competition

Last month, at a news conference in Taiwan, Huang called U.S. restrictions on chip exports a "failure" and warned that the restrictions hurt American companies more than China. Nvidia's position as a key AI chip supplier has placed it in the middle of the technology race between the US and China. This race changed earlier this year with the rise of the Chinese tech startup DeepSeek, whose inexpensive but sophisticated AI model caused a stir.

The Trump team has sought to position the US as a leader in AI. Vice President JD Vance stated that “over-regulation of the AI ​​sector” could “destroy a transformative industry at the very moment it is becoming established” while speaking at the Artificial Intelligence Action Summit in Paris earlier this year.

Future developments and expansion

Dan Ives, global head of technology research at Wedbush Securities, noted that easing export controls may be necessary to prevent China from gaining a competitive advantage in AI. "With the AI ​​revolution entering a new phase of growth, it is important for China's tech firms to gain access to Nvidia's chips, as the current H20 ban hands a large portion of Nvidia's business directly to Huawei on a silver platter," he wrote in a June 11 industry note.

Meanwhile, Nvidia continues its expansion and aims to establish itself as a major player in AI globally. Huang announced on Thursday that the company will build the first cloud computing platform for industrial AI applications in Europe. Additionally, the Blackwell architecture will support new AI infrastructure projects in Europe.

Olesya Dmitracova and Clare Duffy contributed to this article.