Market Losses Nvidia's Market Share in China Drops from 95 to 0 Percent

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Jensen Huang, the founder and CEO of Nvidia, is usually very diplomatic. However, he has now started speaking plainly and strongly criticizing the U.S. government for its chip boycotts against China.

Nvidia, a US manufacturer of AI chips, was the undisputed market leader in the People's Republic before the heated phase of the semiconductor war between Washington and Beijing. That is now over. "We have dropped from a 95 percent market share to zero percent, and therefore I can't imagine any decision-maker thinking that's a good idea," said CEO Jensen Huang in early October 2025 at an event by Citadel Securities in New York.

Exactly three years ago, in October 2022, the US government under then-President Joe Biden imposed an export ban for advanced AI chips from Nvidia to China for the first time, including the H100 and the RTX Pro 6000. For a time, Nvidia still fought for the Chinese market. The company specifically developed two chip variants with reduced performance for the Chinese market to replace the top chips banned by Washington – the H20 and the RTX Pro 6000D.

Later, the company increasingly found itself caught between the millstones of the U.S.-China trade and technology war. Sometimes the H20 was allowed to be delivered to the People's Republic, sometimes not.

Last September, Beijing independently banned its domestic technology companies from purchasing Nvidia chips. Analysts see several motives for this. The Chinese government does not want to watch its domestic semiconductor industry settle for performance-restricted AI chips, referred to in the industry as 'crippled,' they say.

The Gap Must Be Closed

Due to the Chinese ban on Nvidia chips, domestic manufacturers are now forced to fill the resulting supply gap as quickly as possible with semiconductors from domestic Chinese production. In September, Huawei announced an ambitious "roadmap" for its own AI chips. The revenue of the Chinese chip startup Cambricon has increased fourteenfold in the third quarter of this year.

The other reason cited by analysts is that Beijing no longer wants to be blackmailed by Washington—or at least less so. The most recent easing of export restrictions for Nvidia was negotiated by Beijing in July of this year by threatening a shortage of rare earths. Trump relented and allowed the export of H20 chips to China again.

In the trade war with Washington, which has flared up again at full strength and includes threats of imposing additional tariffs of 100 percent on Chinese goods, Beijing can now counter with export restrictions on rare earths. And it can do so without having to beg for AI chips. They simply no longer buy Nvidia chips, and the US immediately loses an important diplomatic lever in its trade and technology war with China.

Huang's Patience on a Thin Thread

For the CEO of a chip company who worked his way up from dishwasher to the globally renowned CEO of a flagship company, all of this is a nightmare. Jensen Huang had remained diplomatic for a very long time. He repeatedly emphasized that he hoped for political insight, for things to settle down. Only now, after the dramatic and complete collapse of his painstakingly built China business, the Nvidia founder is speaking openly for the first time about what he truly thinks of the containment policies of Presidents Biden and Trump, without directly mentioning their names.

"Before we take measures that harm other people, we should take a step back and perhaps think about which policies help the U.S.," Huang said at the event in New York on October 6, 2025. Huang, who came to the U.S. as a nine-year-old son of Taiwanese immigrants and has long since become a U.S. citizen, considers himself an American patriot. He said he would find it good "if the whole world relied on know-how from the U.S.," but that was not very realistic. Half of all talented AI developers are Chinese, Huang said. What harms China often also harms the U.S., Huang added. (sb)