What's going on?

Nvidia admitted that Chinese tech heavyweight Huawei is proving to be a real worthy opponent.

What does this mean?

Nvidia is to chipmakers what Hoover is to vacuum cleaners. But Huawei is one of the many competitors racing to produce the smartest, fastest AI chips. In other words, trying to pull a Dyson. Nvidia is well aware of that: the US firm has classed Chinese-based Huawei as a formidable opponent – not least because it believes US chipmakers are at least a decade away from creating supply chains that don’t rely on China, leaving them more vulnerable to international tensions. After all, China has historically made up a fifth of Nvidia’s sales, and the country’s $7 billion market could switch loyalties for a local chipmaker in a second.

Why should I care?

For markets: China’s supporting local businesses.
The US has been keeping a tight lid on its smartest chips, concerned that unlimited exports to China would result in a high-tech, unbeatable military force. But Nvidia might be in trouble either way. The company’s already warned that its Chinese sales will tank in the coming months – and there’s no guarantee that they’ll bounce back after the ban. Huawei recently surprised the US with a Chinese-made smartphone processor that could rival two-year-old chips from US manufacturer Qualcomm. And if China can shop local, there’s no reason to send business to the states.

The bigger picture: Smart trucks, you’re next.
Huawei’s already giving Nvidia a run for its money – literally. And it’s not just the chip market that the US needs to keep an eye on: the Chinese tech superstar has a toe in the electric vehicle industry and plans to invest into souped-up car systems. Even stock market stalwart Apple has lost out to Chinese innovation, with Xiaomi’s more affordable smartphones stealing attention away from the latest iPhone 15 launch.