Is Huawei’s New AI Chip the Beginning of the End for Nvidia’s Dominance?

Nvidia’s stock just took another hit—and China’s Huawei might be holding the hammer. On Monday, Nvidia (NVDA) shares fell over 2% following reports that Huawei is developing a powerful new chip to rival Nvidia’s AI hardware. This comes amid tightening U.S. trade bans and a $5.5 billion loss for Nvidia. Is this a temporary setback or a seismic shift in the AI chip wars? Let’s dive in.

🌍 The Problem: Geopolitics Meets AI Ambitions

• Huawei’s Ascend 910D: The Chinese tech giant is reportedly testing a new AI chip that could outperform Nvidia’s H100, the gold standard for AI training. The 910D is still in early development but follows Huawei’s 910B and 910C models, which are already shipping 800,000 units to clients like ByteDance (TikTok’s parent).
• Trump’s Export Ban Fallout: The U.S. government recently blocked Nvidia from selling its China-specific H20 chips, costing the company $5.5 billion. JPMorgan estimates the ban could slash up to $16 billion from Nvidia’s 2025 revenue.
• China’s $17 Billion Question: China accounted for 13% of Nvidia’s fiscal 2025 revenue ($17 billion), but analysts suspect smuggling could push that share to 40%.
• Stock Slide: Nvidia shares are down 19% in 2025, driven by AI spending concerns and escalating U.S.-China trade tensions.

✅ Nvidia’s Counterattack: Betting Big on Domestic Growth

• $500 Billion U.S. Supply Chain Push: Nvidia plans to invest heavily in U.S. manufacturing to reduce reliance on foreign markets.
• Blackwell Chips: Nvidia’s latest AI chips (two generations ahead of the banned H100) aim to maintain its technological edge, though they’re not yet available in China.
• Diplomatic Maneuvers: CEO Jensen Huang recently met with Chinese trade officials, signaling efforts to salvage relationships despite export restrictions.

⚠️ Challenges: Smuggling, Probes, and Huawei’s Rise

• 🚧 Chip Smuggling: DA Davidson estimates 40% of Nvidia’s revenue comes from China via underground channels—a lifeline now at risk.
• ⚖️ Regulatory Scrutiny: The U.S. is investigating Nvidia over alleged violations of AI chip export rules.
• 📉 Huawei’s Momentum: Huawei’s 910C chips, set to ship in May, are already competitive with Nvidia’s H100. The 910D could close the gap further.

🚀 Final Thoughts: Can Nvidia Outpace the Storm?

Nvidia’s future hinges on three factors:

• ✅ Domestic Manufacturing: Its $500 billion U.S. investment must accelerate to offset lost Chinese revenue.
• 📉 Geopolitical Agility: Balancing U.S. regulations with global market demands will test Huang’s leadership.
• 🚨 Innovation vs. Competition: Huawei’s rapid progress shows China won’t wait for Western chips. If the 910D delivers, Nvidia’s AI crown could slip.

What do you think? Is this a blip for Nvidia—or the start of a new era in the AI chip race?

Let us know on X (Former Twitter)

Sources: Laura Bratton. Nvidia stock falls as China's Huawei reportedly readies AI chip after Trump's export ban, 2025-04-29. https://finance.yahoo.com/news/nvidia-stock-falls-as-chinas-huawei-reportedly-readies-ai-chip-after-trumps-export-ban-135156741.html