95% to zero market share loss

From Dominance to Zero: Market Collapse

The numbers tell a stark story. Speaking at a Citadel Securities event in October, Huang revealed that Nvidia’s share of the AI ​​accelerator market in China has collapsed from around 95% to zero, with the company now not assuming any revenue from China in its forecasts. This isn’t just a revenue glitch, as China previously represented 20% to 25% of Nvidia’s data center revenue, a sector that generated more than $41 billion in its most recent financial results.

The latest blow came this week when sources claimed the White House told federal agencies that it would not allow Nvidia to sell its latest AI microchips to China, specifically the B30A chip designed to train large language models. Although Nvidia has been providing samples to Chinese customers and working to tweak the design, the Trump administration has taken a hard line.

But Washington’s restrictions represent only half of Nvidia’s problem. Beijing has issued directives requiring new data center projects receiving state funds to use only home-made AI chips, with projects less than 30% complete ordered to remove all installed foreign chips or cancel purchase plans.

It’s a pincer movement that leaves Nvidia no room to maneuver.

The pressure game: too much, or too late?

Huang has long argued that maintaining China’s dependence on American equipment serves US interests. region? By keeping Chinese AI developers tied to Nvidia’s ecosystem, America will retain technological influence.

After meetings with President Trump in July, Huang’s pressure appeared to be working, as Washington agreed to ease some restrictions on chips under a plan in which Nvidia and AMD would pay the US government 15% of their Chinese revenues.

But this optimism proved short-lived. Beijing has since shut Nvidia out of the market through a national security review of its chips, with Huang saying the company’s market share has fallen to zero. The irony is clear: While Huang was pressuring Washington to allow more sales to China, Beijing was simultaneously building barriers to keep Nvidia out.

When Hwang compared energy subsidies supporting China’s industry to what he described as excessive Western regulation, it revealed the fundamental tension in Nvidia’s position. The company needs favorable policy from both capitals, but it operates in an environment where pleasing one increasingly means antagonizing the other.

The cost of technological nationalism

This is not only an institutional problem, it is reshaping the global AI landscape. A Chinese ban would remove foreign chipmakers like Nvidia from a large portion of the market, even if a deal is agreed to allow sales of advanced chips to China to resume.

Meanwhile, Chinese companies have more than US$100 billion in government funding for AI data center projects since 2021, creating a huge market for domestic alternatives.

The political strike has real consequences. Following Trump’s meetings with Chinese President Xi Jinping, highly anticipated trade talks have yielded no concessions from either side on chip policy, with senior US officials rallying against Trump’s initial consideration of Huang’s request to allow the sale of new AI chips to China.

An Nvidia spokesperson’s response to the latest restrictions was clear Reuters: “Zero share in the highly competitive Chinese market for data center computing, and we do not include it in our guidance.” It’s a public admission of defeat wrapped in corporate speak.

China’s measured response

Beijing’s moves reveal a strategy that extends beyond mere retaliation. China has discouraged local tech giants from buying advanced Nvidia chips over security concerns this year, while showing off a new data center powered only by domestic AI chips. The message is clear: dependence on the outside is a weakness that must be eliminated, not managed.

The Chinese government has been carving out market share for domestic chipmakers ranging from Huawei Technologies Co. to smaller players such as Shanghai-listed Cambricon and startups including Metax, More Threads and Inflame.

While these companies struggle to match Nvidia’s performance and software ecosystem, they are getting exactly what they need most: time, money, and a protected market to mature.

Impossible balance

Nvidia’s predicament reveals a broader truth about technology in an age of great-power competition: the middle ground is disappearing. Companies can improve US national security priorities or access Chinese markets, but increasingly not both.

Huang expressed concerns that the West was being held back by “cynicism” and excessive regulation, comparing this to China’s energy subsidies aimed at lowering costs for local developers who use domestic chips. But this comparison misses the point.

The question is not whether China’s industrial policy is more effective, but rather whether NVIDIA is able to operate in an environment where technology has become inseparable from geopolitics. The B30A saga demonstrates the futility of technical compromises.

Even a segment deliberately neutralized to comply with US export controls finds no approval from Washington, while Beijing increasingly views any foreign segment as a strategic weakness. Nvidia can design thousands of variants, each weaker than the last, and still find itself blocked by one venture capitalist or another.

What comes next?

In the short term, Nvidia faces a stark reality: The company now assumes 0% revenue from China across all forecasts. “If anything happens in China… it will be a bonus,” Huang said. This conservative guidance protects the stock but indicates that management doesn’t see any solution in the near term.

The real question is whether this represents a temporary freeze or a permanent break. While this move helps boost sales of domestically developed chips, it also risks widening the gap between the United States and China in artificial intelligence computing power, as US technology giants continue to spend hundreds of billions on data centers powered by NVIDIA’s most advanced chips.

For Nvidia, the way forward will likely involve redoubling its efforts in markets where geopolitics aligns with business — such as the United States, Europe and friendly Asian countries. The China Dream, at least in its previous form, appears to be over. Hwang’s softening of his comments that “China will prevail” reflects this new reality. America may not win by keeping China dependent on its chips, but Nvidia certainly loses if it falls in the middle.

Banning Nvidia AI chips – in both directions – represents more than just export controls or industrial policy. This is proof that in the AI ​​race, there will be no neutral suppliers. Technology companies will increasingly be forced to pick sides, and those who hesitate will find that the choice has been made in their favour.

Nvidia’s fall from 95% to zero market share in China took only months. The question now is whether Washington and Beijing will leave any room for global technology companies to operate at all.

(Image By OpenAI and Nvidia plan $100 billion chip deal for the future of artificial intelligence)

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