But experts tell Fortune Cambricon’s growth reflects a larger push to create local Nvidia rivals in China—especially as the tech giant deals with increased export restrictions under the Trump administration.
“That’s a serious concern for both Nvidia and the U.S. government’s agenda in terms of… dominating AI globally,” he said.
Rasgon pointed out that, in Cambricon’s case, the roughly 44-fold revenue increase to $402.7 million in the first half of this year means the company went from “tiny to small.” He said he’s less focused on the percentage growth than the reason behind it.
“There’s a big push in China for self-sufficiency,” Rasgon said.
“You want to sell the Chinese enough that they get addicted to the American technology stack,” Lutnick added.
Despite technology advancements by Nvidia rivals amid geopolitical tensions, demand for its H20 chips remain—even in the face of regulatory hurdles the company is navigating.
There are already some Chinese products that outperform Nvidia’s H20, analyst Rasgon said. He said he expects greater competition in the local market to only catalyze chip innovation in China.
“Nvidia is never going to be allowed, probably, to sell better parts in China,” Rasgon said. “So for the Chinese, it takes time, but they’re going to work on improving their own stuff. And over time, maybe that gap closes.”
“The China market, I’ve estimated to be about $50 billion of opportunity for us this year if we were able to address it with competitive products,” Huang said during the second-quarter earnings call.
But not only does Nvidia look to resume H20 chip sales in China, the company also wants to expand its product line by introducing the high-performance Blackwell chip in the country, should the U.S. agree.
“We continue to advocate for the U.S. government to approve Blackwell for China,” Kress said during the earnings call. The company aims to “win the support of every developer” in highly-competitive markets, she added, so Nvidia technology can be the world’s gold-standard.
While Zino said the H20 “probably isn’t going to give you enough to offset or get back the revenue” the company had a couple of quarters ago, introducing a Blackwell chip in China just might.
