Nvidia's CFO says there's still 'a little geopolitical situation that we need to work through' before shipping its AI GPUs to China, but it's 'a $2 billion to $5 billion potential opportunity'

Nvidia's executive vice president and chief financial officer, Collette Kress, spoke yesterday at the Goldman Sachs Communicopea event about a variety of topics, including a discussion of its recent financial results and the ongoing situation regarding its dealings with China. When asked for an update on demand for its H20 AI GPU in the country, and what needs to happen before it's potentially shipped in the second-to-last quarter of this year, Kress said:

"Yes, we did receive a license approval and have received licenses for several of our key customers in China. And we do want that opportunity to complete that and actually ship the H20 architecture to them.

"Right now, there is still… a little geopolitical situation that we need to work through between the two governments," Kress continued. "Our customers in China do want to make sure that [the] China government is also very well received in terms of receiving the H20 to them. But we do believe there is a strong possibility that this will occur.

"And so it could add additional revenue. It's still hard to determine how much within the quarter. We talked about it being about a $2 billion to $5 billion potential opportunity if we can get through that geopolitical statement."

We reported last week that tech firms in China, including TikTok owner ByteDance, were reportedly waiting on their GPUs to arrive after placing orders back in July, when Nvidia was first said to be in the process of obtaining the appropriate licenses, with assurances from the US government they would be granted. Since then, Chinese data center operators have been given orders to obtain at least 50% of their chips from domestic manufacturers, while it's also been claimed that Nvidia has suspended production of the H20 chip after security concerns were raised by Chinese officials.

So, by the looks of things, while licenses have indeed been granted to Nvidia to sell its H20 GPUs to China, there are still some serious headwinds to work through before the powerful AI hardware actually arrives on Chinese shores. It certainly seems like Nvidia is confident everything will get straightened out eventually, but this "little geopolitical situation" seems to be gumming up the works significantly.

Still, with an estimated $2 to $5 billion of additional revenue on the line, I'd imagine Nvidia is working hard behind the scenes with both governments to come to a resolution. Us gamers may no longer be the biggest revenue driver for the company, but part of me wonders if the geopolitical intricacies of selling AI hardware to China amid confusing tariffs, export restrictions, and perceived political brinksmanship between the US and Chinese governments has ended up being more of a headache than Nvidia first imagined.

We humble consumer GPU enthusiasts are usually mostly interested in gaming performance and pricing, which I'd say makes us easier customers to deal with. Still, swimming in deep waters attracts big fish, and it seems like Nvidia might still have some paddling to do before reeling in its multi-billion-dollar prize.

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