KEY POINTS
- The U.S. approved roughly 10 Chinese companies including Alibaba, Tencent, and ByteDance to purchase up to 75,000 Nvidia H200 chips each, but not a single chip has been delivered.
- Nvidia CEO Jensen Huang is traveling with President Trump on a state visit to China this month, seeking to break the regulatory logjam holding up billions in potential sales.
- Nvidia stock has risen only 18% in 2026 while the broader PHLX Semiconductor index has outperformed, suggesting the China overhang is capping the multiple.
Zero. That is the number of Nvidia H200 chips that have been delivered to Chinese buyers since the U.S. Department of Commerce approved a new licensing framework earlier this year, despite clearing approximately 10 major Chinese technology companies for purchases. The approved list reportedly includes Alibaba, Tencent, ByteDance, and JD.com, each permitted to buy up to 75,000 H200 processors under the controlled framework. The chips are sitting in limbo, and billions of dollars in revenue are sitting with them.
The bottleneck is not demand. Chinese hyperscalers are desperate for AI compute and have been racing to secure supply of any chips they can legally obtain. The problem is a thicket of compliance requirements that neither side has fully navigated. U.S. rules require Chinese buyers to demonstrate they have installed "sufficient security procedures" and certify the chips will not be used for military purposes. Nvidia must separately certify that it maintains sufficient inventory within the United States before any export shipment can proceed.
Jensen Huang Goes to Beijing
The stalemate is serious enough that Nvidia CEO Jensen Huang is traveling with President Trump on a state visit to China this month, a move that underscores how central the China question has become to Nvidia's growth story. Huang anticipates a potential breakthrough in the stalled sales, though the details of what that breakthrough might look like remain vague. The visit is as much diplomatic theater as it is business negotiation, but for traders, the signal matters: Nvidia's management is treating the China revenue opportunity as worth a personal trip from the CEO alongside the president.
The financial stakes are substantial. At current pricing, 10 customers buying 75,000 H200 chips each represents a potential revenue pool in the range of $20-30 billion, depending on final contract terms and pricing tiers. That is material even for a company that posted $215.9 billion in fiscal 2026 revenue. It is especially material given that Nvidia's stock has underperformed this year, rising only 18% against a PHLX Semiconductor Sector index that has done considerably better.
Why Nvidia Is Lagging the Chip Rally
The underperformance is telling. AMD shares have surged 114% in 2026 on the back of 38% first-quarter revenue growth and accelerating guidance. Broadcom posted fiscal Q1 AI semiconductor revenue of $8.4 billion, up 106% year-over-year, and guided Q2 AI revenue to $10.7 billion. Even TSMC, the foundry partner, delivered 40% revenue growth with 50% profit margins. Nvidia's own numbers are strong in absolute terms — fiscal 2026 revenue hit a record $215.9 billion with earnings per share of $4.77 — but the market is pricing in China risk as a discount.
The broader semiconductor market is in the middle of a generational boom. Bank of America now projects global chip revenue hitting $1.3 trillion in 2026, up from a $1.0 trillion forecast just four months ago, with a path to $2 trillion by 2030. Wall Street's AI chip enthusiasm has broadened beyond Nvidia to Intel, AMD, and Micron, and that rotation partly explains the relative underperformance.
The Export Control Chessboard
The policy backdrop is shifting but remains complicated. The Trump administration lifted the sweeping Biden-era AI chip ban on China in early 2026, replacing it with the controlled licensing framework that currently governs H200 sales. The Council on Foreign Relations has called the new policy "strategically incoherent and unenforceable", and the practical difficulties of certification and compliance bear that out. China, for its part, has been slow to formally approve imports of the H200 even under the new framework.
For traders, the setup is binary. If Huang's trip produces a tangible breakthrough — even partial deliveries or a simplified compliance pathway — Nvidia's stock could rerate sharply higher as the China discount evaporates. If the trip produces nothing but photo opportunities, the overhang persists and the rotation into AMD, Broadcom, and memory names continues. The next catalyst is not an earnings report. It is a diplomatic readout from Beijing.
