Nvidia continues to thrive as demand for artificial intelligence technology grows, despite mounting political challenges between Washington and Beijing.
On Wednesday, the chip designer reported revenue of $46.7bn (£34.6bn) for the second quarter, marking a 56% surge from the same period in 2024.
Shares fell in after-hours trading, however, after the firm admitted it was still “working through geopolitical issues”. The company remains caught in a trade dispute between the United States and China.
The Trump administration’s fast-changing policies, designed to keep America ahead in artificial intelligence, add further uncertainty to Nvidia’s path.
The strength of the AI boom
Nvidia’s advanced chips stand at the heart of the artificial intelligence race.
The company said demand remains strong, particularly from major technology players such as Meta, the owner of Instagram, and OpenAI, the maker of ChatGPT. These firms are expanding their AI infrastructure at rapid speed.
“The AI race is now on,” declared Nvidia chief Jensen Huang during a call with analysts. He said four large technology firms had doubled annual spending to $600bn.
“Over time, artificial intelligence will accelerate GDP growth,” Huang added. “We provide a major part of the infrastructure driving that growth.”
Investment experts also see Nvidia as central to this revolution. Colleen McHugh, chief investment officer at Wealthify, called the company “the core of the AI boom”.
She said Nvidia faced little competition in AI chips and depended heavily on tech giants’ willingness to keep spending. Continued investment, she noted, would keep returns and the share price rising.
Revenue from data centres rose by 56% to $41.1bn, though slightly below analysts’ forecasts. Investor Eileen Burbridge, founding partner of Passion Capital, said the “share price wobble” came from weaker-than-expected data centre results.
Still, she praised the firm’s growth as “unbelievable” but warned of too much enthusiasm creating a possible bubble.
In July, Nvidia became the world’s first company valued at $4trn. The firm now expects quarterly revenue to reach $54bn, surpassing Wall Street estimates.
Geopolitical obstacles remain
Despite record growth, Nvidia faces pressure from political tensions.
In July, the company resumed plans to sell its high-end AI chips to China. The decision followed lobbying from Huang that convinced the Trump administration to reverse a ban on its H20 chips, created for Chinese customers.
The ban had aimed to prevent potential benefits for the Chinese military and local AI developers.
Executives revealed that at the end of July, US officials began reviewing licenses for the H20. Some Chinese customers have since received licenses, but Nvidia has not yet shipped any chips.
The US government is set to claim 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its current outlook and continues lobbying for approval to sell its Blackwell chips in China, the world’s largest chip market.
Meanwhile, China is accelerating efforts to build its own semiconductor industry. “US export restrictions are fuelling domestic chipmaking in China,” said Jacob Bourne, an analyst at Emarketer.
He added that Nvidia’s future may depend on whether its push into robotics allows it to remain “the bellwether of the AI economy”.
