Nvidia, the world’s most valuable company, delivered another quarter of blistering growth, underscoring its unrivaled dominance in the artificial intelligence hardware market even as it confronts intensifying geopolitical headwinds in China.
The company reported $46.7 billion in revenue for the second quarter, a 56% increase year-over-year, driven primarily by its AI-dominated data center division. Net income also surged, climbing 59% to $26.4 billion, cementing Nvidia’s position as the most profitable semiconductor firm in history.
The heart of Nvidia’s earnings story lies in its data center business, which accounted for $41.1 billion of total revenue. Demand for graphics processing units (GPUs), indispensable for training and running large AI models, continues to accelerate across the globe.
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Much of that strength was fueled by the company’s new Blackwell architecture, which alone generated $27 billion in sales during the quarter. Branded as the most powerful AI platform on the market, Blackwell has quickly become the chip of choice for tech firms racing to build and deploy generative AI systems.
“Blackwell is the AI platform the world has been waiting for,” declared CEO Jensen Huang in his earnings statement. “The AI race is on, and Blackwell is the platform at its center.”
Nvidia highlighted its role in supporting OpenAI’s gpt-oss models, unveiled earlier this month, pointing to a feat of computing muscle: processing 1.5 million tokens per second on a single Nvidia Blackwell GB200 NVL72 rack-scale system. That performance exemplifies the exponential leaps Nvidia has engineered, setting the pace in a market where rivals like AMD and Intel have struggled to keep up.
The China Dilemma
Nvidia has continued to face roadblocks in China, historically one of its most important growth markets, despite its triumphs in AI. The company disclosed that it sold no China-focused H20 chips to customers in the country during the quarter. Instead, it reported a $650 million sale of H20 units to a customer outside China.
The challenges stem from a complicated mix of U.S. export controls and China’s domestic policy push to reduce dependence on American hardware. While Washington under previous administrations had imposed sweeping restrictions on advanced chip sales to Beijing, the geopolitical terrain has shifted significantly under President Trump.
In a strikingly unconventional arrangement, Nvidia is now technically permitted to sell some downgraded GPUs to Chinese buyers under a new deal that requires the chipmaker to pay a 15% export tax to the U.S. Treasury.
Even with that opening, the company’s CFO, Colette Kress, noted in the earnings call that shipments remain on hold.
“While a select number of our China-based customers have received licenses over the past few weeks, we have not shipped any H20 devices based on those licenses,” Kress said.
The uncertainty stems from the fact that the tax arrangement has not been formalized in U.S. federal regulation, leaving firms in limbo.
Meanwhile, Beijing has discouraged its companies from using Nvidia chips altogether, pushing them instead toward local alternatives. Earlier this month, reports surfaced that Nvidia had halted production of the H20 chip, a development linked to mounting pressure from Chinese authorities.
The tug-of-war over Nvidia’s chips is a defining flashpoint in the broader U.S.-China tech rivalry. Washington sees GPUs as critical to AI supremacy and national security, while Beijing has accelerated its efforts to build domestic champions such as Huawei and Biren. Nvidia finds itself caught in the middle of a geopolitical contest that could reshape the global semiconductor supply chain.
Despite the cloud of uncertainty over China, Nvidia’s outlook for the next quarter remains bullish. The company forecast $54 billion in revenue for Q3, plus or minus 2%, excluding any potential H20 shipments to China. In other words, Nvidia is assuming the worst-case scenario in China and still projecting record-breaking sales.
For investors, Nvidia thriving amid uncertainties in one of its biggest markets guarantees its bullish future. Its GPUs are the backbone of the AI revolution, powering everything from ChatGPT-like models to autonomous driving platforms. But its international reach is constrained by political decisions beyond its control.
However, the company’s trajectory is believed to be a highlight of two realities. First, the AI boom is still in its early innings, and Nvidia sits squarely at the center. Second, the geopolitical fragmentation of the tech industry is real, and Nvidia’s future growth will depend as much on Washington and Beijing as on silicon innovation.