Beyond market volatility, Nvidia faces ongoing geopolitical challenges that threaten its access to one of its largest markets. Export controls on Nvidia’s chips designed to keep advanced AI tech out of Chinese hands (that date back to 2022, during the early Biden era) have created a thorny obstacle for the company that it has tried to work around over time with new chip designs, including a special lower-speed chip called the H20.
In April, the Trump administration imposed export restrictions on the H20, which require Nvidia to apply for licenses each time it wants to sell the chip to customers in China, costing the company $5.5 billion in charges and effectively shutting Nvidia out of what CEO Jensen Huang has described as a “$50 billion China market.”
Credit:
Benj Edwards / Nvidia
Simultaneously, Trump has also signaled that he may be willing to ease some restrictions after Nvidia promised the Trump administration new US investments in AI data centers. But the administration’s approach remains unpredictable—Trump has continued to voice his desire for the US to remain an AI leader while trying to keep top tech out of the hands of China, creating a challenging environment for Nvidia to navigate.
Meanwhile, Nvidia’s continued success depends on the continued growth of the AI industry, which some critics consider unsustainable at current levels. Some analysts point to the massive capital expenditures by tech giants on AI infrastructure—with companies like Microsoft, Google, and Meta each spending tens of billions annually on data centers—and question whether the returns will justify the investment.
For now, Nvidia sits atop the tech world as the most valuable company, but whether that position proves sustainable will depend on factors ranging from geopolitical tensions to the question of whether AI applications can actually deliver on the tech industry’s promises.