Jensen Huang: Blackwell chips "are indeed likely" to enter China, optimistic about a 50% increase in China's AI market next year

According to the Zhitong Finance APP, NVIDIA (NVDA.US) CEO Jensen Huang stated that the company "is indeed likely" to introduce its advanced Blackwell processors to the Chinese market. At the same time, he called on the U.S. government to open market access channels for American chip manufacturers. Jensen Huang also predicted that China's artificial intelligence market, as the world's second-largest economy, will achieve 50% growth next year.

During NVIDIA's latest quarterly earnings call on Wednesday, Jensen Huang said, "The possibility of us pushing the Blackwell chips into the Chinese market is real," adding, "We must continue to emphasize that American tech companies must be able to stay ahead and win in the AI race, and it is crucial to push the U.S. tech system to become the global standard."

From July to August this year, Jensen Huang personally visited the White House to seek export licenses for NVIDIA's active H20 chips aimed at the Chinese AI market. In August, the White House announced that U.S. President Donald Trump and Jensen Huang had reached an agreement: NVIDIA would receive export licenses for the H20 chips, in exchange for 15% of the chip's sales in the Chinese market being paid to the U.S. government.

After the meeting, Trump expressed an open attitude towards the Blackwell chip-related transactions. Blackwell is NVIDIA's latest generation of AI chips, which currently accounts for the vast majority of the company's data center business revenue.

If NVIDIA plans to launch the Blackwell chips in China, given that Chinese AI developers tend to choose the most powerful chips, this could bring substantial sales to the company. However, to comply with U.S. export control regulations, NVIDIA needs to modify the Blackwell chips for the Chinese market, reducing speed in certain performance dimensions.

In August, Trump stated, "The technology level of the Blackwell chip is extremely advanced, I wouldn't have reached a deal on this chip," but later added that a modified version of Blackwell, which undergoes "reverse upgrades (i.e., performance degradation)" in certain aspects, could still lead to a deal.

Before making these optimistic remarks on Wednesday, NVIDIA had released its second-quarter earnings report: despite not selling any H20 chips to the Chinese market during the quarter, the company's revenue still grew by 56% year-on-year, reaching $54 billion. NVIDIA stated that it had delivered $180 million worth of H20 chip inventory to a customer outside of China, contributing $650 million to sales.

NVIDIA indicated that its forecast for $54 billion in revenue for the quarter ending in October (referring to the third quarter of fiscal year 2025) does not include any sales expectations for H20 chips. However, the company noted that due to geopolitical factors, sales of H20 chips in that quarter could range between $2 billion and $5 billion.

"As long as orders are sufficient, we can expand production capacity," NVIDIA CFO Colette Kress stated during the analyst call.

NVIDIA revealed that although it has obtained some licenses after meeting with Trump, the U.S. government has yet to issue formal regulations clarifying the specific implementation of its chip sales revenue sharing "U.S. government officials have indicated that they expect to take a 15% cut from the sales of licensed H20 chips, but so far, the U.S. government has not enacted regulations to formally incorporate this requirement into law," Kress stated.

Jensen Huang pointed out to analysts that China is the world's second-largest artificial intelligence market. Huang stated, "I estimate that if we can fully tap into the Chinese market with competitive products, this year the Chinese market could bring us about $50 billion in business opportunities," adding, "If we can reach $50 billion this year, then achieving a 50% growth annually in the future is a reasonable expectation."

"There are still several geopolitical issues pending, and intergovernmental consultations, as well as companies' considerations of procurement plans and strategic decisions, are still in progress," Kress stated