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Nvidia to Exclude China from Financial Forecasts Amid U.S. Export Restrictions

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Nvidia will stop factoring in revenue and profit from the Chinese market in its financial forecasts, CEO Jensen Huang told CNN on Thursday, citing ongoing U.S. trade restrictions on chip sales to the region. The decision comes as the U.S. maintains stringent export controls that limit Nvidia’s ability to sell its advanced chips to Chinese customers.

When asked if the ongoing trade discussions between the U.S. and China could lead to a lifting of export controls, Huang said he was not counting on any changes:

“If it happens, then it will be a great bonus. I’ve told all of our investors and shareholders that, going forward, our forecasts will not include the China market.”

Huang reiterated his criticism of U.S. chip export curbs, arguing that they are not achieving their intended policy objectives. “The goals of the export controls are not being achieved,” he said. “The goals have to be well-articulated and tested over time.”

According to D.A. Davidson analyst Gil Luria, Nvidia may face downside risks for 2026 if it remains unable to resume sales to China. Nvidia’s China business remains significant: in the first quarter, China accounted for 12.5% of the company’s total revenue, generating $4.6 billion largely from customers stockpiling the H20 chip before the restrictions took full effect.

The company estimates the export curbs cost it $2.5 billion in lost sales in Q1, with an $8 billion revenue hit projected for Q2. Nvidia is still exploring limited options for the Chinese market but acknowledged:

“Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 billion data center market.”

Michael Ashley Schulman, CIO at Running Point Capital, said Nvidia’s move to exclude China from its forecasts simplifies its financial outlook:

“By zero-basing China, Nvidia removes a volatile variable that neither Wall Street nor the Commerce Department can reliably handicap.”

High-Flyer, the AI Quant Fund Behind China’s DeepSeek, Shifts Focus to Artificial General Intelligence

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Key Highlights:

  • High-Flyer, a quantitative hedge fund, shifted its focus from managing a $13.79 billion portfolio to developing Artificial General Intelligence (AGI).
  • The fund, officially known as Hangzhou Huanfang Technology Ltd Co., is reorienting its resources to pursue AGI, which is a more advanced form of AI capable of surpassing human abilities in most economically valuable tasks.
  • The DeepSeek AI model, which has gained significant attention in the tech world, is part of this new direction under the leadership of Liang Wenfeng, High-Flyer’s founder and the leader of DeepSeek.
  • DeepSeek’s AI models have garnered praise from Silicon Valley and sparked concerns about the computational efficiency of U.S. firms’ AI models, given DeepSeek’s claims of utilizing far less computing power.

Background on High-Flyer’s AI Investment Strategy:

  • High-Flyer has heavily invested in supercomputing clusters, including those made up of Nvidia A100 chips, despite U.S. export controls. These clusters have been crucial for the development of its AI models.
  • The company has also spent millions on high-end Nvidia chips, setting up two AI supercomputing clusters with a combined investment of over $1.2 billion.
  • DeepSeek, which utilizes much less powerful chips (Nvidia’s H800 and H20), has nonetheless sparked debates on its computational capabilities, with some tech executives speculating it may have access to 50,000 Nvidia H100 chips, potentially bypassing U.S. export restrictions.

Future Prospects:

  • Liang Wenfeng has indicated that High-Flyer is not currently seeking external funding for DeepSeek and is more focused on overcoming challenges related to chip restrictions rather than financial concerns.
  • The company’s strategic shift towards AGI signals a long-term commitment to advancing AI technology for human benefit, even as it navigates international tensions over AI and technology exports.