Nvidia Navigates US Export Curbs with Resilient Growth and Strategic Focus on China

Nvidia has reported a remarkable rise in revenue for the first quarter of the fiscal year 2026, reaching $44.1 billion—an increase of 69% year-over-year. Net profits stood at $18.775 billion, up 26% compared to the previous year. Data center operations led the charge, generating $39.1 billion in revenue, a 73% increase from the same period last year. Despite export restrictions impacting its sales of H20 AI chips, Nvidia forecasts second-quarter revenues of approximately $45 billion, subject to a 2% variance.

Amidst these impressive figures, Nvidia CEO Jensen Huang emphasized the strategic importance of the Chinese market, describing it as one of the largest AI markets globally and crucial for the company's international success. Huang expressed confidence that China's AI industry will advance, regardless of access to American chips. This viewpoint underscores the firm's commitment to maintaining competitiveness in China, which he describes as instrumental in shaping global AI trends.

However, Nvidia faces challenges due to recent U.S. export restrictions on AI chips, which have led to significant losses. These limitations led to a $4.5 billion charge in the first quarter and are expected to cause an additional $8 billion reduction in the second quarter’s revenue. Huang acknowledged the difficulties imposed by these restrictions yet remains optimistic about the future of AI technology development in China, driven by its own capabilities in training and deploying models.

Despite the hurdles, Huang is resolute in his belief that protective measures might inadvertently bolster Chinese chip manufacturers' international presence, potentially undermining American industry dominance. Nvidia continues to explore opportunities to fulfill market demands in China even as they navigate through these regulatory constraints.

Looking forward, Huang is set to discuss further strategic insights at the GTC Paris conference, aiming to highlight potential advancements in quantum GPU computing and AI partnerships. Nvidia anticipates continued vigor in AI infrastructure investments by major cloud service providers such as Meta, Alphabet, Apple, Amazon, and Microsoft, further reinforcing its position as a leader in the AI space.