NVIDIA Exits China...

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Joshua Clear
October 20, 2025

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How America Accidentally Turbocharged China's AI Chip Industry

Listen, Nvidia just admitted they lost a $50 billion market basically overnight. Not because their chips got worse. Not because a competitor beat them. Because US policymakers decided to cut off China from advanced AI chips, and the whole thing backfired spectacularly.

Jensen Huang, Nvidia's CEO, just told everyone his company went from 95% market share in China to zero. Complete wipeout. China was 20-25% of Nvidia's data center revenue—we're talking billions per quarter, just gone. And here's the kicker: instead of crippling China's AI development, we just gave them the strongest possible reason to build their own chips.

The Timeline of How We Fucked This Up

October 2022: Biden administration blocks Nvidia's best chips (A100, H100) from going to China. Nvidia responds like any smart company would—they create "watered-down" versions (H800, H20) that comply with the rules.

April 2025: Trump administration says "nah" and blocks those too. Then in August, they offer a deal: you can sell to China, but you pay us 15% of the revenue. Yeah, the US government literally tried to take a cut like some mob protection racket.

But China's regulators told their companies not to buy Nvidia chips anyway (security concerns), and by late August, Nvidia stopped H20 production entirely. Game over.

What Actually Happened

Remember how we thought cutting off chip access would slow China down? Instead:

Cambricon Technologies posted a 4,300% revenue surge in the first half of 2025. Not a typo. They went from losing money to making $144 million in profit.

Huawei is cranking out 600,000-650,000 Ascend chips this year, potentially 1.6 million by 2026.

Alibaba, Baidu, Tencent—they're all deploying domestic chips now. DeepSeek just released an AI model comparable to GPT-5 that's specifically optimized for Chinese chips.

China compressed what should've been a decade-long development cycle into 18 months of state-backed, hyper-focused innovation.

The Revenge Play

Oh, and China controls 90% of rare earth processing—the stuff you need to make literally every advanced chip and weapon system. In October 2025, they expanded export controls to 12 of 17 rare earth elements. Trump threatened a 100% tariff in response, then admitted it wasn't "sustainable."

We're in a full-blown escalation cycle now.

Why This Matters

The US tried to maintain AI dominance through hardware restrictions. Instead, we created permanent competitors who'll challenge us for decades. We handed China the motivation to become technologically independent—the exact opposite of what export controls were supposed to achieve.

And here's the wildest part: 47% of the world's top AI researchers are Chinese. We're cutting off half the global AI research community from American technology while simultaneously forcing them to build alternatives.

Jensen Huang called it perfectly: policies meant to harm China "oftentimes also harm America, and even worse."

Sometimes the biggest strategic mistakes don't look like mistakes until it's way too late.

Sources and References

Here are all the sources used in the research report:

Primary News Coverage

  1. https://fortune.com/2025/10/19/jensen-huang-nvidia-china-market-share-ai-chips-trump-trade-war/

  2. https://www.ndtvprofit.com/markets/nvidias-market-share-in-china-drops-to-zero-from-95-ceo-jensen-huang-flags-us-trade-restrictions

  3. https://www.reuters.com/world/china/china-tightens-rare-earth-export-controls-2025-10-09/

  4. https://finance.yahoo.com/news/jensen-huang-says-nvidia-went-211703977.html

  5. https://tech.slashdot.org/story/25/10/20/1934203/nvidia-ceo-says-company-went-from-95-to-0-market-share-in-china

  6. https://www.pcgamer.com/hardware/nvidia-ceo-jensen-huang-at-the-moment-we-are-100-percent-out-of-china-its-important-to-be-mindful-that-what-harms-china-could-oftentimes-also-harm-america/

  7. https://www.chosun.com/english/industry-en/2025/10/17/EELO4VEMSRF2ZBYPIUVUAA4OLQ/

  8. https://www.channelnewsasia.com/commentary/nvidia-huawei-ai-chips-china-us-export-ban-5407236

  9. https://kbssidhu.substack.com/p/from-95-to-zero-nvidia-ceo-jensen

  10. https://www.tomshardware.com/tech-industry/jensen-huang-says-nvidia-china-market-share-has-fallen-to-zero

  11. https://timesofindia.indiatimes.com/technology/tech-news/upset-nvidia-ceo-jensen-huang-says-our-market-share-has-fallen-to-zero-from-95-in-/articleshow/124653495.cms

  12. https://www.ai-supremacy.com/p/how-china-built-a-parallel-ai-chip-ecosystem-semiconductors-huawei-ai

  13. https://www.globaltimes.cn/page/202510/1345958.shtml

Rare Earth Export Controls

Chinese AI Chip Development

  1. https://www.tomshardware.com/tech-industry/artificial-intelligence/chinas-chip-champions-ramp-up-production-of-ai-accelerators-at-domestic-fabs-but-hbm-and-fab-production-capacity-are-towering-bottlenecks

  2. https://www.digitimes.com/news/a20250911PD232/huawei-cambricon-2026-production-ai-chip.html

  3. https://www.thinkchina.sg/technology/huawei-vs-cambricon-can-two-chinese-nvidias-stall-chinas-ai-ambitions

  4. https://fortune.com/asia/2025/08/27/china-ai-chip-leader-cambricon-sees-record-earnings-boost-deepseek/

  5. https://www.bloomberg.com/news/articles/2025-10-17/ai-chipmaker-cambricon-s-sales-soar-14-fold-with-nvidia-shut-out

  6. https://fortune.com/2025/08/28/trump-trade-restrictions-earnings-tech-chipmakers-china-cambricon-4300-percent-revenue-surge-nvidia-h20-export-ban-ai-competition-semiconductor-industry/

  7. https://www.cnbc.com/2025/08/22/deepseek-hints-latest-model-supported-by-chinas-next-generation-homegrown-ai-chips.html

  8. https://www.rcrwireless.com/20250930/ai-infrastructure/huawei-ai-chips-2

  9. https://finance.yahoo.com/news/nvidia-still-hasnt-finalized-deal-to-kick-15-of-h20-china-chip-sales-back-to-the-us-government-230229161.html

  10. https://www.scmp.com/tech/tech-war/article/3327025/home-grown-heroes-how-huawei-and-deepseek-are-helping-china-break-reliance-us-chips

  11. https://newsletter.semianalysis.com/p/huawei-ascend-production-ramp

  12. https://www.reuters.com/world/china/chinese-ai-startup-deepseek-releases-upgraded-model-with-domestic-chip-support-2025-08-21/

  13. https://www.cnbc.com/2025/08/22/nvidia-halt-h20-chip-production-china-cracks-down.html

  14. https://fortune.com/2025/08/21/china-deepseek-releases-open-source-v3-1-model-to-rival-openai-gpt-5/

  15. https://www.reuters.com/world/china/us-says-chinas-huawei-cant-make-more-than-200000-ai-chips-2025-2025-06-12/

  16. https://ca.investing.com/news/stock-market-news/huawei-to-produce-no-more-than-200000-advanced-ai-chips-in-2025-93CH-4062891

AI Talent and Researchers

US-China Trade Relations

  1. https://www.usatoday.com/story/news/politics/2025/10/20/trump-china-trade-tariffs-rare-earths/86803021007/

  2. https://www.reuters.com/business/retail-consumer/trump-says-he-expects-fair-deal-with-china-vows-speedy-deliver-subs-australia-2025-10-20/

  3. https://timesofindia.indiatimes.com/business/international-business/fantastic-deal-or-155-tariffs-trump-sets-tone-ahead-of-xi-meet-on-us-china-trade-talks-watch/articleshow/124710580.cms

  4. https://www.aljazeera.com/news/2025/10/20/trump-says-he-will-visit-china-early-next-year

  5. https://www.ctvnews.ca/world/article/trump-is-going-to-asia-what-happens-next-is-anyones-guess/

  6. https://globalnews.ca/news/11482562/trump-100-tariff-on-china-not-sustainable/

  7. https://www.cnbc.com/2025/10/10/trump-trade-tariffs-china-software.html

  8. https://www.cnn.com/2025/10/10/economy/trump-china-tariff-threats-economy

  9. https://www.tribuneindia.com/news/world/trump-warns-china-of-a-potential-155-tariff-from-nov-1-over-trade-deal/

Export Controls and Policy

Chinese Tech Companies' Domestic Adoption

Nvidia Financial Performance

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