Nvidia Says 9% China Revenue Won’t Trump U.S. Security, Calls Smuggled AI Centers Dead End
Updated
Updated · CNBC · Jun 24
Nvidia Says 9% China Revenue Won’t Trump U.S. Security, Calls Smuggled AI Centers Dead End
3 articles · Updated · CNBC · Jun 24
Summary
Jensen Huang told Nvidia shareholders that U.S. national security would override any commercial opportunity, saying AI data centers built with smuggled Nvidia gear into restricted markets such as China are a “dead end.”
Advanced AI systems need trusted hardware, software, networking, repairs and ongoing support, he said, arguing black-market operators would struggle to keep such centers running because Nvidia would not help them.
The comments come as Washington tightens scrutiny of AI exports to China; Nvidia said it still has generated no revenue from H200 chips cleared for export last year and does not know whether China will permit imports.
China, including Hong Kong, accounted for about 9% of Nvidia’s fiscal 2026 revenue, down from the prior two years, underscoring the shrinking role of the market under export controls first imposed in 2022.
At the annual meeting, Huang also said AI return on investment has been proven, highlighted more than $96 billion in fiscal 2026 free cash flow, and reiterated plans to return 50% of free cash flow to investors.
With China refusing its chips, can Nvidia's security-first strategy outpace a $30 billion annual revenue loss?
As the U.S. restricts AI access, is it securing its lead or accelerating China's independent tech rise?
Nvidia promises an AI future, but can America's own strained energy grid actually power it?
U.S.-China AI Chip Smuggling: $2.5 Billion Crackdown, Nvidia’s Response, and the Future of Global Tech Competition
Overview
The report highlights a global surge in enforcement against the illicit smuggling of advanced AI chips, marked by landmark criminal prosecutions across several countries. This aggressive, multi-jurisdictional crackdown has led to immediate and severe legal, financial, and reputational risks for companies and individuals who attempt to bypass U.S. export controls. Notably, a Taiwanese court detained individuals involved in smuggling, showing the real legal consequences of such actions. The crackdown has also caused significant market impacts, such as a sharp stock drop for Super Micro Computer after its co-founder was arrested in a high-profile 'China Chip Case.'