Nvidia Reports Record Revenue Despite Sharp Decline in China Sales Under Export Controls
US chipmaker Nvidia has expressed frustration over the export restrictions that have limited its access to China’s fast growing artificial intelligence market, but those challenges did little to slow the company’s overall momentum. Nvidia posted record breaking earnings for the third quarter, showcasing the enormous global demand for its AI chips even as sales in China dropped sharply.
According to the company’s financial report released on Wednesday, Nvidia’s total revenue surged 62 percent year on year, hitting an all time high of 57 billion U.S. dollars for the quarter ending October 26. This remarkable performance highlights how deeply Nvidia’s hardware is now embedded in the worldwide AI infrastructure, powering data centers, cloud services and advanced computing systems.
However, the picture looked very different in China, historically one of Nvidia’s most important markets. Sales in China, including Hong Kong, fell 63 percent to just 3 billion U.S. dollars during the same period. The decline is directly tied to tightened U.S. export rules that restrict the sale of cutting edge AI chips to Chinese companies. These regulations have reshaped the competitive landscape, forcing Nvidia to rethink how it serves the region.
Nvidia said it was “disappointed” by the restrictions, noting that the company had long worked with Chinese partners and had played a significant role in supporting the country’s tech ecosystem. The company emphasized that the policy environment, rather than market demand, was behind the sudden decline in revenue.
To navigate the limits imposed by Washington, Nvidia introduced the H20 graphics processing unit last year, a specialized AI chip designed specifically to comply with U.S. export rules for China. But sales of the H20 were modest. The model generated only about 50 million U.S. dollars this quarter and could be sold only under special licenses issued by the U.S. government in August. Analysts say that although Chinese companies remain eager to invest in AI hardware, the restricted performance of the H20 makes it less competitive than Nvidia’s flagship chips sold in other markets.
Even so, Nvidia’s global outlook remains strong. Demand from data center operators, cloud computing providers and AI developers continues to expand rapidly. Companies across multiple sectors now depend on Nvidia’s GPUs to run generative AI models, train robotics systems and process vast datasets. This broad based adoption has helped the company offset regional losses and sustain its record breaking growth.
Nvidia has indicated that it will keep working to meet the needs of international customers despite ongoing geopolitical and regulatory headwinds. For now, the company’s rising revenues show that its dominance in the AI hardware market remains firmly intact, even as uncertainty lingers over its long term position in China.
