Nvidia has been a leader in the AI world, especially after OpenAI’s ChatGPT made waves in 2022. However, things have taken a turn for the worse in 2025. The company’s stock, which soared by 171% in 2024, has now dropped by about 20%.
So, what happened? Nvidia used to earn a lot from sales in China, but now it’s facing big problems there. US export rules are making it hard for Nvidia to sell its advanced AI chips to China. CEO Jensen Huang said that sales in China are now about half of what they used to be.
Things got tougher last month when tighter rules from the U.S. completely banned the export of Nvidia’s special H20 chip to China. This move surprised investors, and Nvidia had to report a huge $5.5 billion loss because of unsold H20 chips.
Adding to their troubles, tariffs—the extra taxes on products traded between countries—are rising. The U.S. has put a 145% tariff on Chinese goods, and China has responded with its own 125% tariffs.
To make matters worse, Nvidia is facing tough competition from Huawei, a Chinese tech giant. Huawei is about to release a new AI chip called the Ascend 920, which is aimed at taking market share from Nvidia. Chinese companies like ByteDance, Alibaba, and Tencent are excited to use Huawei’s chips, which could help fill the gap left by Nvidia’s weakened presence in the country.
FAQs:
Why is Nvidia’s stock down in 2025?
It’s due to export restrictions, loss of sales in China, and increasing competition from Huawei.
Why can’t Nvidia sell its H20 chips?
New US export restrictions have completely banned those sales to China.
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