Nvidia reported record first-quarter revenue of $81.6 billion on Wednesday, an 85 percent increase from $44 billion a year earlier, driven by explosive demand for artificial intelligence infrastructure. However, the results came alongside a stark admission from CEO Jensen Huang, who told CNBC that the company has largely conceded China's AI chip market to Huawei as United States export restrictions continue to reshape the global semiconductor landscape. The combination of record profits and a candid acknowledgment of market loss underscored the complex geopolitical forces shaping the AI industry.
The earnings announcement revealed that Nvidia's data center division, the engine of its growth, generated $75.2 billion in revenue, up 92 percent from the same quarter last year. The company also announced an $80 billion share repurchase authorization and raised its quarterly dividend from one cent to 25 cents per share, signaling confidence in sustained demand. Huang described the current period as the buildout of AI factories, calling it the largest infrastructure expansion in human history and noting that it was accelerating at extraordinary speed.
Regarding China, Huang's comments marked a notable shift in tone from previous quarters. He acknowledged that Huawei is very strong and had a record year, adding that the Chinese competitor will very likely have an extraordinary year ahead. He noted that the local ecosystem of Chinese chip companies was doing quite well because Nvidia had evacuated that market. The admission was particularly significant given that Nvidia once held an estimated 95 percent share of China's AI chip market before Washington imposed successive rounds of export controls beginning in 2022.
Huang struck a cautious note on the prospect of any near-term reopening of the Chinese market, telling investors to expect nothing regarding approvals to sell advanced chips into the country. At the same time, he expressed a desire to return should conditions change, pointing to 30 years of partnerships and customers in China. Analysts noted that Nvidia's ability to post record results despite losing access to the world's second-largest economy demonstrated the overwhelming global demand for AI computing power that continues to offset the China shortfall.
The earnings report sent ripples through global technology markets, with investors weighing the implications of Nvidia's dominant position in AI infrastructure against the permanent loss of a massive market. Industry observers pointed out that Huawei's rise as a domestic AI chip champion could accelerate China's push for semiconductor self-sufficiency, potentially creating a bifurcated global chip ecosystem. The results also reinforced concerns among US policymakers about whether export controls are achieving their intended strategic goals or merely accelerating the development of competitive alternatives abroad.
Looking ahead, Nvidia projected continued strong demand as technology companies, governments, and sovereign wealth funds pour hundreds of billions into AI data centers worldwide. The company's gross margins held steady near 75 percent, suggesting pricing power remains intact despite growing competition. Wall Street analysts broadly maintained bullish outlooks, though several flagged the China situation as a long-term risk that investors should monitor closely as geopolitical tensions between Washington and Beijing show no signs of easing.
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