Nvidia CEO Jensen Huang has openly acknowledged that the company has “largely conceded” the Chinese artificial intelligence chip market to Huawei and local competitors due to stringent U.S. export restrictions.

This comes as the company delivered another record-breaking quarter and positioned itself for major new growth in an emerging $200 billion market, announced by CEO Jensen Huang.

Speaking to CNBC after reporting exceptional fiscal results, Huang was pragmatic about the challenges in China while expressing strong confidence in Nvidia’s ability to capture massive new opportunities elsewhere.

Nvidia reported revenue of $81.62 billion, an impressive 85% increase from $44.06 billion a year earlier. The performance underscores the continued explosive demand for its GPUs amid the global race to build AI infrastructure. The company also announced an $80 billion share buyback program and raised its dividend, signaling strong belief in its long-term growth trajectory despite geopolitical headwinds.

Huang was blunt about the impact of U.S. policy on Nvidia’s presence in China, a market that once represented at least 20% of its data center revenue.

“The demand in China is quite large. Huawei is very, very strong. They had a record year, they’ll likely, very likely, have an extraordinary year coming up, and their local ecosystem of chip companies are doing quite well, because we’ve evacuated that market. We’ve really largely conceded that market to them,” he said.

Huang tempered expectations for any near-term relief, telling investors to “expect nothing” regarding approvals for advanced chips. However, he left the door open for the future.

“We would be more than delighted to serve the market. We have a lot of customers there, we have a lot of partners there, and we’ve been there for 30 years,” he added.

The comments come shortly after President Donald Trump’s summit with Xi Jinping in Beijing. While limited approvals for Nvidia’s H200 chips were granted to companies such as Alibaba, Tencent, ByteDance, and JD.com, broader restrictions remain firmly in place, and chip policy was not a central focus of the high-level discussions.

Vera CPU Unlocks Brand New $200bn Market

Despite the setback in China, Huang outlined an ambitious vision for growth through Nvidia’s new Vera CPU platform, which he described as purpose-built for the emerging era of agentic AI — autonomous AI systems capable of complex reasoning, planning, and task execution.

Huang called this a transformative new addressable market: “Vera opens a brand new $200 billion TAM for Nvidia, a market we have never addressed before, and every major hyperscaler and system maker is partnering with us to deploy it.”

He revealed that Nvidia has already generated $20 billion in sales of standalone Vera CPUs this year, even as the product is still ramping up. Huang believes agentic AI will lead to billions of AI “agents” functioning like digital workers, each requiring powerful CPUs optimized for rapid token processing and tool usage — distinct from the GPU-heavy workloads used for training large models.

“The world has a billion users, human users. My sense is that the world is going to have billions of agents… We’re going to need a lot more CPUs,” he said.

This expansion forms part of Nvidia’s broader “five-layer cake” strategy, spanning energy infrastructure, chips, systems, models, and applications. By controlling more layers of the AI stack, Nvidia aims to capture greater value and build deeper moats against competitors.

Nvidia’s new reality was orchestrated by the new geopolitical reality reshaping the semiconductor industry. U.S. export controls have accelerated China’s drive for technological self-sufficiency, benefiting Huawei and a growing ecosystem of domestic players. At the same time, they are compelling Nvidia to accelerate innovation and diversification in markets where it retains clear leadership.

The Vera CPU launch represents a bold move into the traditional CPU domain long dominated by Intel and AMD. With major cloud providers like Amazon, Google, and Microsoft developing their own custom silicon, Huang is betting that Nvidia’s tightly integrated platform, combining Vera CPUs with its dominant GPUs, will give it a decisive advantage in the shift toward agentic and physical (robotic) AI systems.

Wall Street continues to watch closely. While Nvidia’s dominance in AI infrastructure remains overwhelming, concerns linger about potential margin pressure and competition from in-house solutions at hyperscalers. However, the early traction of Vera suggests the company is successfully extending its reach into adjacent high-growth areas.

In recent years, the vaping market hasn’t really moved in one single direction. It has started to split, slowly but noticeably, into different patterns of use. Nicotine-based products are still the most common overall, but there is a steady shift happening on the margins toward nicotine-free options.

What’s interesting is that this shift doesn’t really feel like something being introduced by the industry. It feels more like users gradually changing how they approach the same devices. For a growing group of adult vapers, vaping is less about nicotine delivery and more about flavor, routine, or simply how they use it in specific moments of the day.

In practice, this shows up in simple behavior changes. Some users don’t fully switch — they alternate depending on context. A disposable device with nicotine might be used during the day, while nicotine-free options appear more often in casual situations like evenings out, short breaks, or travel, where lighter setups feel more practical.

Over time, the devices themselves have also improved. Earlier nicotine-free vapes often had clear trade-offs — weaker flavor output, inconsistent performance, or shorter lifespan. That gap has narrowed with better coil systems, improved airflow design, and the wider use of rechargeable disposable devices and pod systems that now perform more consistently across different usage styles.

This is also reflected in how products are now structured in the market. Many retailers and manufacturers now separate nicotine-free products into dedicated categories, making them easier for users to identify and compare. Some platforms simply group them under dedicated zero nicotine vape sections.

Instead of being treated as a niche add-on, nicotine-free options are now just another part of the same ecosystem.

Flavor still plays a major role in why users stay within this category. Without nicotine, fruit and ice blends are often described as feeling slightly more open and less muted, although the difference is usually subtle.

There is also a practical side that shows up in real use. Nicotine-free vaping tends to appear in specific situations rather than as a constant habit — travel days, social environments, or short breaks during work, where users prefer something lighter and less tied to routine.

It also helps that nicotine-free versions now exist across different device types, including compact pod systems, rechargeable disposable vapes, and higher-capacity devices designed for longer, more flexible use.

Overall, this is not a replacement of traditional vaping. It is more of a parallel layer that users move in and out of depending on situation, preference, and daily context.