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Nvidia (NASDAQ:NVDA) is deepening its China commitment with plans to open a new AI research center in Shanghai to shore up sales and counter local rivals, according to the Financial Times.
The center comes as China accounted for 14% of Nvidia's revenueabout $17 billionin fiscal 2024, and Jensen Huang estimates that could swell to $50 billion within a few years.
Nvidia's China sales have been dented by U.S. export curbs and Trump-era tariffs, and the company is under pressure from Huawei's chip push, so the new facility aims to address complex technical requirements under White House restrictions while keeping chip design and production offshore to protect intellectual property.
Beyond China-specific R&D, the Shanghai hub will optimize existing products and explore adjacent markets like autonomous driving, while tapping elite Chinese AI talent to strengthen its competitive moat.
The FT reports that local authorities have given preliminary support and that Nvidia has lobbied Washington for export-license approval. President Trump himself praised Huang on a recent overseas trip, noting Nvidia's estimated 99% market share in advanced AI chips.
Why It Matters: China remains Nvidia's second-largest market after the U.S., and capturing a bigger slice through localized innovation could drive outsized growthespecially as enterprise AI workloads expand.
This article first appeared on GuruFocus.