Sanctions help the second of them expand its influence in the home market of China.
Reuters representatives were able to discover an interesting innovation in the text of NVIDIA’s annual report on Form 10-K: for the first time, the Chinese company Huawei Technologies is mentioned as one of NVIDIA’s major competitors. The reasons for this are Huawei's ability to develop and produce computational accelerators for artificial intelligence systems, server central processing units and telecommunications components.
Image source: Huawei Technologies
NVIDIA’s logic becomes more understandable in the context of the company’s revenue decline in the Chinese market caused by the expansion of US sanctions. As mentioned yesterday, the Chinese market contributed no more than 6% of NVIDIA's server revenue last quarter, although overall it continues to account for up to one-fifth of the company's total revenue. Although Huawei, which produces computing accelerators, has been under US sanctions for a long time, they do not prevent it from supplying its own products to Chinese consumers, some of whom will be forced to abandon NVIDIA computing accelerators.