What happened
The US government maintains tightened export controls on advanced AI chips, impacting Nvidia's ability to sell its Blackwell chips in China. Nvidia CEO Jensen Huang expressed a desire to enter the Chinese market, despite anticipating a potential 'zero' market share due to these restrictions. Previously, Nvidia's market share in China was 95%, but it has now fallen to zero. China represents nearly 55% of the global chip market in the first half of 2025, and the Chinese government is reportedly favouring domestic chip manufacturers over modified Blackwell chips developed by Nvidia for that market.
Why it matters
The tightened US export controls introduce a significant operational constraint on the procurement and deployment of advanced AI chips within China. This creates a market access control gap for international technology providers and increases the due diligence requirements for procurement and compliance teams operating in or serving the Chinese market. Organisations face heightened exposure to supply chain disruptions and a reduced ability to leverage leading-edge hardware, potentially necessitating a re-evaluation of technology roadmaps and vendor strategies for regional operations.
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