Nvidia has found itself in a precarious situation. In January 2026, the U.S. government formally allowed it to sell its H200 chips to China, Jensen Huang personally lobbied in Washington and even traveled to Beijing, and yet? Not a single chip has crossed the border. Literally zero.
Stuck Between Two Superpowers
At a House Foreign Affairs Committee hearing on February 24, a direct question was asked: how many H200 chips has China received so far? David Peters, Assistant Secretary of Commerce for Export Enforcement, answered briefly: "To my knowledge, none so far." The Department of Commerce has not approved any sales licenses. Not a single shipment has left.
That is remarkable because the Trump administration gave Nvidia the green light two months ago. At the time, the White House argued that selling chips to China would paradoxically weaken Chinese companies such as Huawei, because why would they try to catch up with Nvidia when they could simply buy its products? The logic is interesting, but the reality looks different.
Sales have been halted by both sides. Washington introduced security inspections for shipments, while Beijing has yet to formally authorize imports. During its earnings call on February 26, Nvidia admitted that although it had obtained a license for a limited quantity of H200 chips, revenue from China remained at zero. "We do not know whether imports into China will be permitted at all," CFO Colette Kress told investors directly. And that is a statement that must have sent a chill through every shareholder. China previously accounted for at least one-fifth of Nvidia's data center revenue. That is an enormous amount of money the company loses every month that shipments remain at a standstill.
The conditions under which Trump authorized the sales are also unusual. The chips must undergo inspection on U.S. soil, and the U.S. claims a 25% share of every sale. So far, Beijing has quietly ignored such conditions.
Chinese Rivals and Chip Smuggling
While legal trade is at a standstill, illegal trade is flourishing. Peters admitted at the hearing that chip smuggling into China is taking place and is among the highest priorities for export-control enforcement. Even more strikingly, Reuters reported on the same day that Chinese startup DeepSeek trained its latest AI model on Nvidia H100s—chips whose export to China is prohibited. How did they get there? That is a question Washington has yet to answer satisfactorily.
And this is where the truly unpleasant part for Nvidia begins. While the company waits for a diplomatic breakthrough, Chinese technology companies are moving full steam ahead. Huawei, Cambricon, MetaX, and Moore Threads are strengthening their positions, listing on stock exchanges in Hong Kong and mainland China, and attracting billions in investment.
Kress commented on this as follows: "Our competitors in China, strengthened by recent IPOs, are advancing and have the potential to disrupt the structure of the global AI industry over the long term." OpenAI's Sam Altman sees it no differently. He described Chinese technology companies as "remarkable" and acknowledged that in some areas they are close to the global cutting edge.
Rory Green, an analyst at TS Lombard, put it even more bluntly: "It is easy to imagine a world where most of the global population is running on a Chinese technology stack in five to ten years." Strong words. And Nvidia is hearing them while its chips sit in storage.
Consequences for Nvidia
Jensen Huang estimates that China's AI chip market could reach approximately $50 billion in the coming years. It is a market Nvidia is fighting for, but so far it has not earned a single cent from it. The company included no revenue from China in its first-quarter 2026 forecast because it simply does not know what will happen.
Nvidia has found itself in a diplomatic trap. It has a license, it has customers, and it has a product. It lacks only one thing: certainty that a shipment will reach its destination at all. And every week that passes without an agreement is another week in which Chinese companies grow stronger and Nvidia loses ground in a market it helped build.
Sources: cnbc.com and bloomberg.com
