On May 20 (local time in the United States), following the release of its financial report, chip behemoth NVIDIA announced that, due to the ever-tightening U.S. export controls, it has essentially pulled out of China’s high-end AI chip market—a sector now predominantly dominated by Huawei. Earlier, NVIDIA had crafted specialized chip versions tailored for the Chinese market. However, the intensifying restrictions imposed by the U.S. government culminated in a ban on its compliant chip, the H20, forcing NVIDIA to retreat.

NVIDIA’s departure has opened up avenues for growth for domestic chip companies, with Huawei leading the charge. Orders for Huawei’s Ascend series chips have skyrocketed, delivering performance on par with NVIDIA’s flagship offerings but at a more competitive price point. Moreover, tech titans such as Alibaba and Tencent, along with Tesla’s China factory, have commenced testing or integrating Huawei’s AI chips into their operations.

NVIDIA’s predicament underscores how the technological rivalry between China and the United States is reshaping the global AI semiconductor landscape.