Nvidia’s stock continued its recent slide on Monday, falling nearly 4% after reports emerged that Huawei is preparing a new generation of AI chips aimed at challenging the U.S. chipmaker’s dominance. The news adds another layer of pressure for Nvidia, which has already been dealing with escalating trade restrictions and rising concerns over AI spending.
Huawei Steps Up Its AI Push
Huawei is reportedly testing its latest AI chip, the Ascend 910D, with several Chinese tech firms. The chip is intended to surpass the capabilities of Nvidia’s H100 processors, a key product for data centers and AI development. While still early in development, Huawei’s ambitions signal a clear intent to fill the vacuum left by U.S. export bans, which have cut Chinese companies off from Nvidia’s most advanced technology.
In addition to the new chip, Huawei plans to ship over 800,000 units of its existing Ascend 910B and 910C processors, distributing them across major Chinese telecom companies and AI developers. Analysts view the scale of these shipments as a sign that Huawei’s AI chip strategy is maturing faster than many in the market had anticipated.
The Growing Impact of U.S. Trade Restrictions
Nvidia has been steadily warning investors that U.S. trade policy could have severe consequences for its China business. Earlier this month, the company disclosed a $5.5 billion expected loss tied to restrictions on its H20 chips, which were designed specifically for the Chinese market to comply with previous regulations.
The broader financial toll could be even higher. Some analysts estimate that Nvidia could lose as much as $16 billion in revenue this year as a result of new export controls. China historically accounts for around 13% of Nvidia’s annual sales, but other estimates suggest the figure could climb to 40% when factoring in unofficial shipments through third-party channels.
Adding to the pressure, the U.S. government recently launched an inquiry into the potential misuse of Nvidia’s AI chips in China, signaling further regulatory hurdles ahead.
A Difficult Year for Nvidia Stock
Nvidia shares have struggled throughout 2025, sliding more than 17% year-to-date. Once seen as the clearest winner of the AI boom, the company now finds itself at the center of investor concerns around slowing AI infrastructure spending by Big Tech, regulatory risks, and growing competition both domestically and abroad.
The latest news around Huawei’s chip development only deepens fears that Nvidia’s dominance in high-end AI hardware could face real challenges in the years ahead.
Looking Ahead
Nvidia’s next steps will be closely watched as it tries to navigate a tougher regulatory landscape and intensifying global competition. The company has already pledged $500 billion to expand domestic AI chip production, an effort to build resilience against supply chain and trade policy risks.
Meanwhile, Huawei’s rapid progress suggests the AI chip race is becoming more crowded — and that Nvidia may need to innovate even faster to maintain its lead.
