Nvidia’s fate in China may look a lot like what BYD did to Tesla

Nvidia posted another record quarter; $46.7 billion in revenue, a 56% increase from a year ago, and $26.4 billion in net income, as Cryptopolitan reported last week.

It’s expecting to hit $54 billion next quarter. But one major gap jumped out. The company didn’t make a single dollar from China through its H20 chip.

The company is now in the same position Tesla was in before BYD ran it out of town. This is a classic Beijing move: welcome the outsider until the local player is ready, then freeze them out.

According to CNBC, Nvidia is still trying to hold onto its China business. It’s not walking away. It’s doubling down with a new chip, the B30A, designed to dodge U.S. export controls. It’s reportedly more powerful than the H20 but still technically legal. It’s a chip built to survive the politics, not the market.

And this comes while the company is already dealing with U.S. restrictions and accusations of backdoors in its products; none of which have stopped it from pushing its Blackwell Ultra platform for U.S. and allied data centers. But the obsession with China hasn’t ended.

Beijing pressures buyers as Cambricon gains ground

Inside China, regulators are now telling firms like Alibaba, ByteDance, and DeepSeek to explain why they’re still using Nvidia gear. Buying from a U.S. firm is now seen as a risk, because it’s political.

Local companies don’t want to be caught investing in foreign tech while Xi Jinping pushes his plan for full domestic control of AI hardware and software. At the April Politburo study session, Xi said indigenization wasn’t optional, it was national policy.

That’s opened the door for Cambricon Technologies, China’s answer to Nvidia. The company’s stock has exploded, up nearly 10x in two years. It turned a profit this year and is working on its Siyuan 690 processor, which analysts say could compete with the H100 and beat the restricted H20.

What makes this more than just a business story is that Cambricon is already on the U.S. Commerce Department’s Entity List. Every chip it sells, every investor it gains, is treated inside China as proof that local tech can win without American help.

Firms like DeepSeek have started building AI models for “home-grown chips soon to be released.” They’re not waiting for Cambricon to catch up to Nvidia. They’re moving on.

That’s what happened with BYD and Tesla, Huawei and Apple, DeepSeek and ChatGPT. It’s the same script. Beijing uses foreign firms until their replacements are ready, then moves the market in a different direction.

On Nvidia’s latest earnings call, the company confirmed what was already obvious: no H20 sales in China in Q2, and none expected in Q3. Executives blamed “geopolitical issues,” but didn’t go further, and they didn’t need to.

U.S. policy adds fuel as Nvidia gets cornered

Things weren’t helped when Howard Lutnick, the new U.S. Commerce Secretary under President Donald Trump, made headlines in July with a comment that set Chinese tech on fire.

He said the U.S. strategy was to sell China “not the best stuff, not the second-best stuff, not even the third best… just enough to get [China] addicted.” That quote wasn’t ignored. Chinese security agencies and state-backed firms used it to argue that buying from Nvidia was dangerous and humiliating. It killed any quiet deals that might have gone under the radar.

Now, local firms are under pressure to reject the H20 completely, which means Nvidia is getting squeezed from both ends. Washington tells it what it can’t sell. Beijing tells buyers what they shouldn’t buy. And in the middle is a chipmaker trying to serve two governments with totally different goals.

Meanwhile, China is pushing forward with its AI Plus initiative. The plan is to build domestic AI into every sector of the economy by 2030. It includes big spending on local chips, high-bandwidth memory, and compute infrastructure.

Cambricon is the poster child for that plan. If the Siyuan 690 gets close enough to Blackwell Ultra, it’s enough. Xi’s government doesn’t need the best, it needs “good enough” and 100% Chinese.

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