For those not in the know, Nvidia CEO Jensen Huang has been in China attempting damage control in front of trade officials. During a meeting with the China Council for the Promotion of International Trade he said:  "We're going to continue to make significant effort to optimize our products that are compliant within the regulations and continue to serve China's market."

But America's chipmakers also have a greater fear that their retreat from China could turn tech giant Huawei into a global chip-making powerhouse.

Huang’s real worry is geopolitical: a world where Huawei’s data centres, powered by increasingly competent AI chips, become the backbone of China’s Belt and Road Initiative. That would let Beijing pump infrastructure — and influence — across the globe.

Semiconductor whisperer Handel Jones said: “For the US semiconductor industry, China is gone.” His forecast? By 2030, Chinese firms will dominate every major chip category in the domestic market.

Wadhwani AI Center at the Center for Strategic and International Studies director Gregory C. Allen, said Nvidia's previous generation of chips perform about 40 per cent better than Huawei's best product, but that gap could dwindle if Huawei scoops up the business of its American rivals.

Nvidia was expected to make more than $16 billion in sales this year from the H20 in China before the restriction. Huawei could use that money to hire more experienced engineers and make higher-quality chips.

Allen said the US government's restrictions could help Huawei bring on customers like DeepSeek, a leading Chinese AI startup. Working with those companies could help Huawei improve the software it develops to control its chips. Those kinds of tools have been one of Nvidia's strengths over the years.

As analyst Patrick Moorhead told The New York Times: “This kills NVIDIA’s access to a key market,” adding that Huawei would happily hoover up those customers instead. The US may think it’s crippling China’s chip scene, but it may just be accelerating it."

With US restrictions targeting sales to China, the cocaine nose jobs of Wall Street’s favourite semiconductor darlings watched their shares take a nosedive: Nvidia dropped 8.4 per cent, AMD slipped 7.4 per cent, and troubled Chipzilla was down 6.8 per cent.

AMD reckons it’s staring at a bill of up to $800 million, while Nvidia is prepping to eat a $5.5 billion quarterly write-off — a healthy sum even for Huang's padded margins.