Nvidia Awaits Chinese H200 Revenue as Sales Lag Behind Expectations

Nvidia’s Q1 2027 guidance underscores a stark reality: the company is projecting zero revenue from Chinese datacenters, even as it awaits clearance for its flagship H200 accelerator. The H200, a 2023‑vintage chip that the firm touts as its most powerful AI engine, was cleared for limited export by the U.S. in early December after the Trump administration lifted a ban in exchange for a 25 percent revenue cut for the U.S. Treasury, according to The Register. Yet Beijing has not granted import permission, leaving Nvidia without any sales in the world’s largest AI‑training market. CFO Colette Kress confirmed that “we have yet to generate any revenue, and we do not know whether any imports will be allowed into China,” and she does not expect the situation to improve in the near term.

The absence of Chinese H200 sales creates a notable gap in Nvidia’s growth outlook, especially given the chip’s central role in the company’s datacenter strategy. While Nvidia posted a record $120 billion profit last year, analysts at Bloomberg note that the stock remains “stuck” despite blowout earnings, suggesting that investors are wary of the company’s reliance on a handful of high‑margin products and the geopolitical headwinds that could curtail them. Reuters reported that Wall Street’s enthusiasm for Nvidia’s recent earnings “sparkle vanished” as the market digested the lack of a China upside, prompting a sell‑off that highlighted the sensitivity of Nvidia’s valuation to any hint of a slowdown in AI‑related demand.

Kress also warned that the broader tech decoupling could erode Nvidia’s competitive moat. She cited the rapid progress of Chinese rivals—bolstered by recent IPOs—that could “disrupt the structure of the global AI industry over the long term.” This sentiment echoes concerns voiced by AMD and other partners, who have publicly questioned the sustainability of Nvidia’s dominance in a market where domestic Chinese alternatives are gaining traction. The CFO’s remarks align with a Gartner analyst’s recent critique of “orbital datacenter” hype, describing the space‑based AI push as “peak insanity” and warning that companies risk misallocating capital on projects whose economics are not yet proven.

CEO Jensen Huang, meanwhile, has turned the conversation toward the nascent frontier of AI in space. In an interview cited by The Register, Huang outlined the technical challenges of deploying GPUs beyond Earth—limited airflow, reliance on conduction for heat dissipation, and the impracticality of liquid cooling—while arguing that high‑resolution imaging could justify on‑orbit processing to avoid transmitting petabytes of raw data back to ground stations. He admitted that “the economics of space‑based datacenters are poor” today, but suggested that cost structures may improve as technology matures. Gartner’s Bill Ray echoed this caution, labeling the orbital datacenter market a bubble that “companies are wasting money” on, a view that underscores the broader skepticism about Nvidia’s speculative bets outside its core datacenter business.

The confluence of these factors—blocked Chinese sales, a cautious investor base, and ambitious yet uncertain forays into space—paints a nuanced picture of Nvidia’s growth trajectory. While the company’s datacenter revenue continues to expand, the lack of a clear path to monetize the H200 in China introduces a material risk to its forward‑looking guidance. As analysts at Bloomberg and Reuters observe, Nvidia’s valuation now hinges not only on its ability to sustain record earnings but also on how effectively it can navigate geopolitical constraints and validate emerging revenue streams beyond Earth. Until Beijing grants import approval for the H200, Nvidia’s “yet more growth coming soon” will likely be measured against a backdrop of heightened scrutiny from both investors and regulators.