Nvidia Faces Pressure as Huawei Develops Competitive AI Chip
Nvidia’s stock dropped by 3.7% on Monday following reports that Chinese tech giant Huawei is developing a new advanced AI chip. This development comes in the wake of President Trump’s export ban on Nvidia’s chips to China, which has caused significant disruption for the company.
According to The Wall Street Journal, Huawei is preparing to ship its new AI chip, the Ascend 910D, a successor to the 910B and 910C models. The 910D is expected to compete directly with Nvidia’s H100 AI chips, which have been banned from sale to China. The 910D chip is still in early development, and Huawei has reportedly begun discussing testing the chips with Chinese tech companies.
The company also plans to ship more than 800,000 Ascend 910B and 910C chips to customers, including state-owned telecom carriers and major AI developers like TikTok parent ByteDance.
Impact of Trump’s Export Ban on Nvidia
Nvidia’s challenges stem from a US export ban implemented earlier this month, which prevents the sale of H20 chips—a key product for Nvidia’s Chinese market. The company stated it would face a $5.5 billion loss due to the policy change, with JPMorgan analysts estimating that the ban could result in a $16 billion revenue loss for Nvidia in 2025.
Nvidia’s China revenue was significant in fiscal year 2025, accounting for $17 billion, or 13% of the company’s total revenue. However, analysts like Gil Luria of DA Davidson suggest that Nvidia’s revenue from China could be even higher, possibly reaching 40%, when factoring in chip smuggling.
Nvidia’s Stock Struggles in 2025
Nvidia has been facing a tough year in 2025, with its stock down over 17% year-to-date. The chipmaker has suffered from investor scrutiny over its AI spending and the effects of Trump’s trade war. Additionally, the US government has initiated an investigation into Nvidia’s AI chip sales to China, further exacerbating concerns.
This month, Reuters reported that Huawei’s 910C chips, which are competitive with Nvidia’s older H100 chips, are set to begin shipping as soon as May. This adds to the growing competitive pressure Nvidia faces in the Chinese market, which could challenge its dominance in AI chips.
CEO Jensen Huang’s Strategic Moves
In response to these challenges, Nvidia CEO Jensen Huang recently visited China to meet with trade officials, signaling the company’s continued focus on the region. Despite the export ban, Nvidia is also looking to expand its domestic manufacturing footprint in the US, pledging a $500 billion investment in the American AI supply chain.
