Nvidia’s Puzzling China PR Play

As we wrap up for the Labor Day weekend, one question has persisted through this week: Why is Nvidia CEO Jensen Huang so determined to demonstrate his need for the Chinese market? With Nvidia’s ability to sell its artificial intelligence chips to China currently in limbo—caught between U.S. and Chinese government restrictions—another CEO might be playing down China’s importance to the company. Nvidia is growing like gangbusters without China, so you can imagine another CEO saying, “Don’t worry, we’ll be fine.”

But that’s not what Huang did on Wednesday. In talking to analysts about Nvidia’s July-quarter results, he spotlighted just how much business Nvidia is missing out on. “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,” he said, adding that it’s likely to grow 50% per year, in line with the rest of the world. (In comparison, analysts project Nvidia will generate $206 billion in revenues in the 12 months ending January, according to S&P Global Market Intelligence.) Huang also noted on the call that half of the world’s AI researchers are in China and most of the leading open-source models are created there. “It’s fairly important, I think, for the American technology companies to be able to address that market,” he said.