In just two years Nvidia has gone from leading the GPU market to artificial intelligence (IA) in China to not sell practically anything in this country. In fact, Jensen Huang, the CEO of this company, has confirmed just a few hours ago now Its market share in this Asian nation is 0%. This dramatic scenario for Nvidia is the result of two decisive strategies of the governments of China and the United States.
Early October 2024 the Chinese Administration sent to its AI companies a recommendation asking them to use chips produced in China as much as possible. Ten months later this recommendation became a requirement. And the Chinese Government is already forcing state-owned data centers throughout the country to use at least 50% Chinese integrated circuits in their servers.
The Administration led by Xi Jinping has made this decision because it can afford it. And it is that It already has three very clear alternatives to Nvidia: Cambricon Technologies, Huawei and Moore Threads. This panorama has led Jensen Huang to decide to openly criticize the US export policy. AND has done it on several occasions during the last few years. The head of Nvidia is not enough to be the most attractive option for his Chinese customers; It also has to deal with the decisions of the US Government.
US sanctions on China are destroying Nvidia
Jensen Huang holds that the US will not protect its technological hegemony by blocking AI chip exports; According to this executive, what Donald Trump’s Government must do is ensure that the American AI ecosystem is dominant worldwide. The current scenario proves him right, but at the moment nothing indicates that the US Administration is going to bet on its strategy. At least not in a consistent way from a practical point of view.
And the US Department of Commerce does not give the slightest respite to American AI chip designers. When these companies receive an order from one of their Chinese clients must apply for an export license to this government entity and indicate which GPU they intend to send to China, their specifications and which client is going to use them, among other relevant information.
The Office of Industry and Security is also responsible for carrying out investigations into the tariffs deployed by the Administration led by Donald Trump.
Once the bureaucracy has been put in place, Department of Commerce technicians analyze export applications in the framework established by current regulation and approve or deny the sale of integrated circuits to China. This is the usual procedure, so there is nothing new up to this point. However, Nvidia, AMD and other American AI chip designers face a very serious problem: the Commerce Department takes several months to process their export licenses.
The staffing of the Department of Commerce has been drastically reduced in recent months, and in the current context this scenario represents a very serious problem. The Industry and Security Office of this entity is not only responsible for processing export licenses linked to AI chips; is also responsible for carrying out tariff investigations deployed by the Administration led by Donald Trump. And with fewer personnel than in 2024 and 2025 it cannot cope.
According to Bloombergthe Office of Industry and Security has lost 101 employees in recent months, which represents a 19% reduction in staff compared to what it had in 2024. Curiously, the staff specifically dedicated to developing standards linked to the semiconductor industry and reviewing applications for export licenses has decreased by 20%, although at the moment it has not emerged what is the reason for this staff drain. Be that as it may, during 2025 the Office of Industry and Security took an average of 76 days to resolve export requests, but this period is increasing in 2026. Very bad news for Nvidia and AMD.
Image | NVIDIA
More information | Tom’s Hardware
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