Nvidia Faces China GPU Rivalry After US Chip Ban

Temporary US restrictions on Nvidia’s AI chips have permanently reshaped China’s AI hardware landscape, giving rise to local alternatives like Huawei’s Ascend 910C, which now commands 25 percent of China’s market, up from virtually nothing.

In contrast, Nvidia’s market share in China fell from 60 percent to 45 percent, despite a policy reversal that now allows resumed sales of the H20 chip. The restriction period created a rare market vacuum, fostering local trust in domestic solutions and accelerating China’s drive toward technological self-sufficiency — echoing Japan’s 1980s semiconductor leap after US trade tensions.

Key Highlights

• Huawei grew to 25 percent market share as Nvidia’s fell to 45 percent
• Nvidia lost $2.5B in revenue and faced a $4.5B inventory charge
• Black market for Nvidia chips surged, with A100s hitting $20K in China

Nvidia’s financial hit was steep: a $2.5 billion revenue loss and a $4.5 billion charge on unsold inventory, even after customizing the H20 to meet earlier US compliance rules. The abrupt reversal, reportedly following a meeting between CEO Jensen Huang and former President Donald Trump, shows how executive diplomacy is now a core tech leadership function.

While Nvidia now resumes legal shipments, it returns to a more competitive Chinese GPU ecosystem—and a black market still thriving on $20,000 A100 chips and creative workarounds by smaller cloud providers.

Also Read: Nvidia Hit by AI Chip Ban Fallout as Singapore Tightens Rules

This episode underscores a new era of technology geopolitics, where innovation, diplomacy, and enforcement gaps define business outcomes more than product specs alone.