Jensen Huang's Late-Night Calls With President Trump Come as Nvidia's China AI Chip Shipments Fall 44% in the First Half of 2026. Here's Why His Access Matters.
Key Points
Chinese technology giants have reportedly ordered over $35 billion worth of Nvidia chips, but supply constraints threaten delivery schedules.
Nvidia's AI chip shipments to China have plunged 44%, while Huawei continues to gain ground.
Jensen Huang's direct access to President Donald Trump comes as export restrictions and Chinese competition complicate Nvidia's long-term growth prospects.
- 10 stocks we like better than Nvidia ›
ByteDance, Alibaba, and Tencent have reportedly ordered more than $35 billion worth of Nvidia (NASDAQ: NVDA) RTX PRO 5500 graphics cards at list prices, according to Reuters. Yet Nvidia may still deliver only a fraction of these orders, since Chinese demand exceeds its planned production capacity. These are reported orders, not realized revenue.
According to an IDC report, Nvidia's shipments of data center artificial intelligence (AI) chips to China fell 44% year over year in the first half of 2026. These developments highlight two key challenges for Nvidia in China. U.S. export restrictions are limiting sales of its most advanced AI chips, while production constraints threaten deliveries of its export-compliant alternatives.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Political access cannot guarantee sales
In June 2026, Nvidia CEO Jensen Huang told the Associated Press that President Donald Trump sometimes calls him late at night to discuss jobs, manufacturing, and national security. Huang also attended Trump's Sept. 24 state dinner for Chinese President Xi Jinping. Reuters reported no breakthrough on AI-related disputes from that summit. Washington also has national security reasons to restrict exports of advanced computing.
Nvidia's experience with the H200 AI chip highlights the limitations of U.S. export approvals. Although the company received licenses to ship limited quantities to China, Chinese government restrictions prevented it from selling the full permitted amount. The H200 shipments accounted for less than 1% of the data center segment's quarterly revenue. Nvidia also recorded a $400 million charge in the first half of fiscal 2027 for excess H200 inventory and purchase commitments.
Nvidia's H200 chips are manufactured by Taiwan Semiconductor Manufacturing in Taiwan. However, U.S. export licenses require these chips to be shipped to the United States for inspection before delivery to China. This subjects them to a 25% U.S. import tariff, which Nvidia says it cannot pass on to customers, further pressuring profitability.
The bigger risk is losing China's computing ecosystem
According to IDC, Huawei accounted for 28% of Chinese data center AI accelerator shipments in the first half of 2026, narrowing the gap with Nvidia's 34% market share. Domestic suppliers are also expanding sales of specialized processors. Nvidia has warned that its restricted access to China is helping competitors build larger developer and customer ecosystems, potentially making it harder to regain lost market share even if export restrictions ease.
Reuters reports that total Chinese orders exceed 6 million cards, while Nvidia may produce no more than 3 million globally in 2027. Commercial deliveries are expected in the first quarter of 2027, when Nvidia is expected to prioritize manufacturing capacity for its more advanced Rubin platform. Increasing China-export-compliant chip production could divert capacity from other chips rather than simply create additional sales.
Nvidia's near-term growth does not depend on Chinese data center chip sales. The company's revenue surged 106% year over year to $96.2 billion in the second quarter of fiscal 2027 (ended July 26, 2026). The company's third-quarter guidance of $108 billion also assumes no data center compute revenue from China.
Restored Chinese data center sales could therefore provide additional revenue beyond Nvidia's current guidance. But shareholders should distinguish that potential from realized profit. Huang's access to Trump can provide a channel for influencing U.S. policy, but it does not guarantee Chinese sales.
The more consequential question is whether Nvidia can regain China's data center customers before competitors become too established to displace.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $344,608!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,327,222!*
Now, it’s worth noting Stock Advisor’s total average return is 904% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 27, 2026.
Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Taiwan Semiconductor Manufacturing, and Tencent. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
Recommended Articles
