Nvidia(US:NVDA) 3 6 Ke·2025-07-15 11:34Core Insights - Nvidia plans to resume sales of its "compliant" AI chip H20 in China after months of export restrictions, coinciding with its market valuation surpassing $4 trillion, indicating a complex strategic decision amid geopolitical tensions and market expectations [1][2] - The Chinese market is crucial for Nvidia, contributing over 25% of its data center revenue before the export ban, making the loss of this market a significant blow to its growth narrative [2][4] - The introduction of the H20 chip is not just about recovering lost sales but also about restoring investor confidence in Nvidia's growth story, demonstrating its ability to navigate geopolitical challenges [3][4] Market Dynamics - Nvidia's strategy involves launching "compliant" or "special supply" chips like H20, which are designed to meet U.S. export control regulations while maintaining compatibility with its CUDA software ecosystem, a significant advantage for Chinese customers [4][5] - The H20 chip has reduced core computing performance and limited NVLink interconnect capabilities to comply with U.S. regulations, yet retains compatibility with CUDA, which is critical for existing software investments in China [4][5] - The Chinese market's response to Nvidia's H20 is mixed; while there is immediate demand due to ongoing AI projects, there is a growing consensus on the need for a self-sufficient AI technology ecosystem in China [7][10] Competitive Landscape - The potential for a "de-Nvidia" strategy is emerging in China, driven by the need for a domestic AI technology framework, with companies like Huawei rapidly developing competitive alternatives [7][10] - Regulatory actions, such as potential antitrust investigations against Nvidia, reflect China's strategic intent to create a fairer market environment for local competitors and counter U.S. influence [8][10] - Nvidia's compliance strategy may inadvertently accelerate its own obsolescence in the Chinese market, as local companies adapt to lower-performance hardware and develop new operational habits [11][12] Long-term Implications - Nvidia's return to the Chinese market represents a trade-off between short-term financial gains and long-term strategic positioning, as its previous monopoly is increasingly challenged [12] - The company's high valuation of $4 trillion, while a testament to its past success, poses a significant burden as it navigates a rapidly evolving and competitive landscape in China [12]