All eyes on China restrictions as Nvidia gets set to report results

During a press conference in Taipei on May 21, 2025, Jensen Huang, the co-founder and CEO of Nvidia Corp., addressed the ongoing growth in sales of graphics processors, particularly in the artificial intelligence sector. However, as Nvidia prepares for its upcoming earnings report, the company is facing a different sentiment compared to previous quarters, largely due to recent developments involving China.

The Trump administration’s requirement for an export license for Nvidia’s H20 chip, tailored for the Chinese market, has led to a significant $5.5 billion write-down on inventory. This move, aimed at compliance with U.S. restrictions on AI chip usage for military purposes, has raised concerns about future revenue for the chipmaker.

Analysts anticipate a substantial revenue growth of 66% for Nvidia in the quarter ending in April, but this marks a notable decline from the company’s previous growth rates. There is uncertainty surrounding future projections, with analysts expecting a 53% growth in the current quarter and the full fiscal year.

Nvidia CEO Jensen Huang has highlighted the impact of chip restrictions on the company’s market share in China, emphasizing the need for engineers in the country to develop their own processors. Despite recent regulatory changes rescinding some restrictions on exporting AI chips to China, questions persist about Nvidia’s plans for China and its replacement H20 chip. The company is actively lobbying for licenses to continue shipping its products to China.