China Threatens Nvidia With Its Own Company

"At the center of the artificial intelligence (AI) chip negotiations has been Jensen Huang, the head of Nvidia and perhaps the most powerful man in the industry. By some measures, his chips have a 92% market share. The company's financial results and stock price would support that. The stock is up 1,250% in the past five years, far outpacing the S&P 500's 85% gain. Nvidia is the world's most valuable company by market cap at $4.46 trillion."

"Huang argues that China's AI advances could be as fast as those in the U.S. China and the U.S. are in a race for AI supremacy. Some experts think China may already be close to parity. The Wall Street Journal compared it to the Cold War. The paper noted, "Beijing's strategy is to throw everything it has at the problem.""

"Secretary of Commerce Howard Lutnick said the U.S. would only sell China its "fourth best" chips. The Chinese reaction was meant to show the Trump administration that it would build the world's best AI chips without any outside help. That may have happened. Shares in Moore Threads, China's answer to Nvidia, started to trade on the Shanghai exchange with a burst as the stock rose 500% on the first day of trading."

U.S. export restrictions block sales of Nvidia’s most powerful chips to Chinese interests while some access has been routed through third countries. Secretary of Commerce Howard Lutnick said the U.S. would only sell China its "fourth best" chips, and China moved to demonstrate independent capability. Moore Threads, positioned as China’s Nvidia rival, saw its shares jump 500% on debut after an IPO that raised a little more than $1.1 billion. Nvidia holds roughly a 92% market share in AI chips, with revenue of $57 billion last quarter and per-share earnings of $1.30, and the company projects continued strong results.

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