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Nvidia Earnings: China Revenue Drops to Mid-Single Digits Amid Biden Chip Controls
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Good(3)Good quality. Reputable source with community review or editorial standards, but less rigorous than peer-reviewed venues.
Rating inherited from publication venue: Fortune
Relevant to discussions of compute governance and export controls as an AI safety tool; illustrates real-world effects of US chip restrictions on AI hardware access in China.
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Importance: 35/100news articlenews
Summary
Reports on Nvidia's earnings results showing a significant drop in China data center revenue to mid-single digit percentages following Biden administration export controls on advanced AI chips. The article highlights the financial and geopolitical implications of US semiconductor restrictions on Nvidia's business and the broader AI chip supply chain.
Key Points
- •Nvidia's China data center revenue fell to mid-single digit percentages of total revenue following US export controls
- •Biden administration chip controls significantly curtailed Nvidia's ability to sell advanced AI chips to Chinese customers
- •Despite China losses, Nvidia's overall earnings remained strong due to surging global demand for AI compute
- •Export restrictions reflect broader US policy to limit China's access to cutting-edge AI hardware
- •The case illustrates how geopolitical policy directly shapes the distribution of AI compute capabilities globally
Cited by 1 page
| Page | Type | Quality |
|---|---|---|
| US AI Chip Export Controls | Policy | 73.0 |
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# Nvidia’s China sales are down to a ‘mid-single-digit percentage,’ as U.S. controls restrict exports of the $1.7 trillion chipmaker’s leading AI chips
By
[Lionel Lim](https://fortune.com/author/lionel-lim/)
Lionel Lim
Asia Reporter
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By
[Lionel Lim](https://fortune.com/author/lionel-lim/)
Lionel Lim
Asia Reporter
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February 22, 2024, 1:26 AM ET
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Visitors at the Nvidia stand at the 2022 Apsara Conference in Hangzhou, China, Nov. 3, 2022.Future Publishing/Getty Images
[Nvidia](https://fortune.com/company/nvidia/) crushed expectations with a bumper quarterlyearnings report on Wednesday, reporting a 265% increase in revenue from the same period a year ago, sending shares up over 9% in extended trading. CEO Jensen Huang said Nvidia [now has](https://fortune.com/2024/02/21/nvidia-earnings-ceo-jensen-huang-gpu-demand-supply-allocate-fairly/) to “allocate \[chips\] fairly” as customers flock to its processors, key to the AI boom. “Accelerated computing and generative AI have hit the tipping point,” Huang said.
But amid the blowout quarter, Nvidia also acknowledged how tensions between the U.S. and China, particularly over semiconductors, is affecting its business. China now represents a “mid-single-digit percentage” of Nvidia’s data center revenue, chief financial officer Colette Kress said on Wednesday. She suggested that China would make up a similar percentage of revenue for the current quarter as well. (Data center revenue aligns with Nvidia’s AI chip business.)
It’s a significant drop: Nvidia has previously noted that China made up as much as a quarter of the company’s data center revenue.
The U.S. first announced controls on sales of advanced semiconductors to China in October 2022. Companies like Nvidia then developed chips that complied with the restrictions yet still offered the same advanced capabilities. The Biden administration [updated](https://fortune.com/asia/2023/10/18/nvidia-china-export-ban-biden-jensen-huang-ai-military-taiwan/) its restrictions last October to close that loophole.
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