Nvidia ties China chip stance to U.S. security as export controls shape revenue outlook

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Nvidia China chip export controls

Highlights

Nvidia CEO Jensen Huang affirms the company will prioritize U.S. national security over commercial interests, refusing support for smuggled chips in restricted markets like China.
The U.S. government authorized exports of Nvidia’s H200 chip to China, but no revenue has been generated as China has not yet permitted imports of these products.
China and Hong Kong account for about 9% of Nvidia’s fiscal 2026 revenue, a declining market share amid export controls, while Nvidia pledges to return 50% of free cash flow to investors.

Shareholder meeting sets out export compliance stance

As reported by CNBC, Nvidia CEO Jensen Huang tells shareholders that the company would put U.S. interests first if a commercial opportunity conflicts with national security. Speaking shortly after Nvidia’s annual stockholder meeting, he says companies trying to smuggle Nvidia chips or systems into restricted markets such as China would face difficulty using them because Nvidia would not provide support or repairs.

Huang says advanced AI data centers depend on trusted hardware, software, networking and ongoing support, making improvised systems built from smuggled products a "dead end." His comments come as Washington regulators and the Trump administration remain increasingly concerned that exports of advanced AI software and hardware to China and other countries could create national security risks.

Earlier this month, Anthropic, which uses Nvidia chips, shut down Fable 5 and Mythos 5 after the U.S. government ordered it to disable access to its most advanced models. Nvidia chips have been subject to export controls since 2022, pushing the company to develop China-specific products that comply with U.S. benchmarks.

China exposure and capital returns remain in focus

Huang says the U.S. government approved licenses for exports of Nvidia’s H200 chip to China, but the company has not yet generated revenue from those chips and does not know whether China will permit imports of its products. Last year, the U.S. cleared the H200, the same model used by U.S. companies, for export to the region.

China, including Hong Kong, accounts for about 9% of Nvidia’s fiscal 2026 revenue, a smaller share than in fiscal 2025 and 2024. That indicates the company’s exposure to the market is still meaningful, but is declining as regulatory limits reshape sales patterns.

At the same meeting, Huang says the question of AI return on investment "has been answered," arguing that useful AI output such as code generation makes token production profitable and drives demand for more computing capacity. He points to GitHub pull requests nearly tripling this year because of AI and says Nvidia systems, while not the cheapest to buy, generate lower-cost tokens, higher throughput and more revenue.

Nvidia also reiterates plans to return 50% of free cash flow to investors through share repurchases and dividends over the next few years. The company generates more than $96 billion in free cash flow in fiscal 2026, while shareholders approve executive compensation on an advisory basis, re-elect all 10 board members and pass an outside proposal requiring shareholder votes to be decided by a simple majority.

In our earlier article on China curbing Nvidia chip imports, we noted that tighter U.S. export restrictions and additional Chinese customs blocks were squeezing official supply routes for Nvidia’s AI chips, while lifting black-market prices and increasing uncertainty around H200 shipments. The piece also highlighted how these cross-border regulatory risks were weighing on NVDA’s near-term outlook and trading sentiment, with the stock facing resistance and an elevated chance of further downside until clarity improves.

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