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NEW YORK — Nvidia shares dipped on Wednesday as investor concerns mounted over the future of the company’s business in China, which remains entangled in the ongoing trade tensions between Washington and Beijing.
The decline followed Nvidia’s second-quarter earnings report, which exceeded Wall Street expectations with $46.74 billion in revenue. However, the company did not include any projected sales of its H20 AI chips to China in its third-quarter guidance, citing unresolved geopolitical issues and export restrictions.
Earlier this year, the U.S. government imposed curbs on advanced chip exports to China, prompting Nvidia to halt shipments of its H20 chips—designed specifically to comply with prior restrictions. Although the Biden administration recently granted conditional export licenses, Beijing has reportedly urged domestic firms to limit purchases over national security concerns.
Nvidia has since agreed to pay 15% of its China-related chip revenue to the U.S. government in exchange for continued export access, a deal that has drawn bipartisan scrutiny. Analysts warn that the uncertainty could impact Nvidia’s market share in China, which accounted for roughly 13% of its revenue last year.
Despite the setback, demand for Nvidia’s AI chips remains strong globally, driven by major cloud providers and tech firms racing to expand generative AI infrastructure. Still, the unresolved status of its China operations continues to weigh on investor sentiment.
Excerpts sourced from Reuters, CNN, and The Motley Fool.
