Nvidia revenue soars on AI demand despite US-China trade tensions

Nvidia has reported another blockbuster quarter, fuelled by the global surge in artificial intelligence (AI), even as it struggles with geopolitical headwinds between Washington and Beijing.

The chip designer posted $46.7bn in revenue for the second quarter, up 56% year-on-year. Data centre sales — the backbone of AI infrastructure — also surged 56% to $41.1bn, though results came in just shy of Wall Street forecasts. Despite the strong growth, shares dipped in after-hours trading.

Riding the AI Boom

Nvidia’s advanced chips remain critical to the AI race, powering systems at Meta, OpenAI, and other tech giants investing heavily in the sector. CEO Jensen Huang told analysts that annual AI spending by four major firms has doubled to $600bn, calling it a driver of long-term global economic growth.

In July, Nvidia became the world’s first $4 trillion company, underscoring its dominance in AI. Looking ahead, the Santa Clara-based company expects revenue to climb further to $54bn this quarter, exceeding analyst expectations.

Trade Tensions Complicate Growth

Still, Nvidia remains caught in the escalating US-China trade dispute. After lobbying efforts, the Trump administration partially lifted its ban on the firm’s China-specific H20 AI chips, though the US is now reviewing licenses for their sale. The company confirmed no shipments have yet been made, despite some Chinese firms receiving approvals. Washington is expected to take a 15% cut of revenue from licensed H20 sales.

Nvidia has also pushed for approval to sell its latest Blackwell chips to China, its largest overseas market, but has not factored these into its outlook. Meanwhile, analysts warn that US export restrictions are accelerating China’s efforts to build domestic rivals.

“US export restrictions are fuelling domestic chipmaking in China,” said Emarketer analyst Jacob Bourne, adding that Nvidia’s expansion into robotics may be key to sustaining its role as the “bellwether of the AI economy.”