Nvidia will no longer factor the Chinese market into its revenue and profit forecasts, CEO Jensen Huang said Thursday in an interview with CNN, in response to US trade restrictions on semiconductor sales to Beijing.
The current restrictions have already cost Nvidia $2.5bn in sales in Q1, with an additional impact of $8bn anticipated for Q2.
Asked about a possible easing of US measures after this week's trade talks in London with China, Huang said he was not working on that assumption. "But if that happens, it will be a bonus. I have told all our investors and shareholders that going forward, our forecasts will exclude the Chinese market," he said.
The Nvidia boss reiterated his criticism of the restrictions, in line with his statements last April, when the US blocked the sale of the H20 chip specifically designed for the Chinese market. "The objectives of these export controls are not being achieved," he said. "And so, as with any measure of this kind, the objectives must be clear and stand the test of time."
According to Gil Luria, an analyst at D.A. Davidson, if Nvidia cannot resume sales in China beyond the current quarter, forecasts for 2026 could be revised downward.
Nvidia said it was still reviewing its "limited options" for maintaining a presence in the Chinese market. "Until we finalize a new product design and receive approval from the U.S. government, we are effectively excluded from the $50bn Chinese data center market," the company said.
"By removing China from its projections, Nvidia is eliminating an unstable variable that neither Wall Street nor the Commerce Department can truly anticipate," commented Michael Ashley Schulman, chief investment officer at Running Point Capital, adding that any sales in China would now be a pleasant surprise.
Before the controls came into force, Nvidia had generated $4.6bn in revenue in the first quarter from sales of the H20 chip, which is widely stockpiled by Chinese customers. During this period, China accounted for 12.5% of the group's total revenue.
