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Jensen Huang went on CNBC after Nvidia's Q1 earnings last week and said something that deserves way more attention than it got. His exact words about China: "We've evacuated that market. We've really largely conceded that market to them." He was talking about Huawei. This is the CEO of the most valuable company on earth, on the record, saying he handed a market worth billions to his biggest competitor. Nvidia posted $81.6 billion in revenue that same quarter, up 85% year over year, and announced an $80 billion buyback. And yet the message on China was basically: it's gone.
What makes this surreal is the timing. Just a week before that interview, Trump was aboard Air Force One calling Nvidia's Blackwell chip the "super duper chip" and telling reporters he might bring it up with Xi. After the actual meeting, he said the topic never came up. Meanwhile the Commerce Department had already approved roughly 10 Chinese companies, including Alibaba, Tencent, ByteDance, and [JD.com](http://JD.com), to buy up to 75,000 H200 chips each. Not a single chip has shipped. Beijing told those companies to hold off. Nvidia also confirmed it hasn't even applied for a Blackwell export license to China because, in Huang's words, "they've made it very clear that they don't want Nvidia to be there right now."
So within the span of two weeks you have the US president hyping chip sales, the government approving the exports, China refusing to place orders, and Nvidia's own CEO telling investors to "expect nothing." That is not a coherent strategy from anyone involved.
Here's what's actually happening on the ground while this political theater plays out. Huawei is projecting around $12 billion in AI chip revenue for 2026, up over 60% from $7.5 billion last year, according to FT and Reuters reporting. Their Ascend 950PR entered mass production in March, and the same Chinese cloud companies approved to buy H200s are ordering from Huawei instead. Then last Sunday Huawei unveiled something called the Tau Scaling Law at an IEEE conference in Shanghai, laying out a roadmap to reach chip density equivalent to 1.4nm by 2031 without EUV lithography. Whether they actually hit that target is very much an open question. But the signal is clear: China is building its own semiconductor path and putting serious engineering resources behind it.
Cambricon, one of only two companies on Beijing's approved AI hardware procurement list alongside Huawei, just posted Q1 revenue of $423 million, up 160% year over year, with net profit up 185%. Two years ago this company was losing money. Morgan Stanley estimates the Chinese AI chip market could reach $67 billion by 2030 with domestic suppliers capturing over three quarters of it.
I've been watching the AI hardware trade mostly through the Nvidia and AMD lens like everyone else here, and only recently started paying attention to what's building on the other side. There's a $12 billion revenue stream and a projected $67 billion market constructing itself entirely outside the American chip stack. SMIC is scaling its foundry output. Cambricon is ramping toward 500,000 AI accelerator shipments this year. Huawei's supply chain is pulling in orders that were supposed to go to Nvidia.
What surprised me when I started digging is that most US listed China tech ETFs are still heavily weighted toward internet and ecommerce names. I came across CNQQ, which tracks about 100 companies across A shares and Hong Kong listings with holdings like Cambricon, CATL, and Zhongji Innolight sitting alongside Tencent and Alibaba. It frames itself around transformative China tech, covering semiconductors, AI infrastructure, EV and battery supply chains, and advanced manufacturing rather than just the consumer internet platforms. That said, this whole space carries real risk. Single country concentration, regulatory unpredictability, currency exposure, tech sector cyclicality, and the fact that newer vehicles in this category have limited live track records all need to be weighed seriously.
What I keep coming back to is whether the current earnings trajectory from companies like Cambricon actually supports that $67 billion market estimate, or if China's domestic chip supply chain still needs several more years to prove it can compete on sustained performance rather than policy tailwinds alone.