Jensen Huang-Led Nvidia Plans New Shanghai Research Hub To Stay Competitive In China As US Export Curbs Threaten AI Chip Sales: Report

Nvidia Corporation NVDA is reportedly expanding its research footprint in China with a new Shanghai-based R&D center, signaling a strategic push to retain AI dominance in the region amid tightening U.S. export restrictions.

What Happened: Nvidia CEO Jensen Huang met with Shanghai Mayor Gong Zheng last month to discuss plans for the new facility, reported the Financial Times, citing two people with knowledge of the matter.

Nvidia is already leasing new office space in Shanghai to house current staff and accommodate the expansion.

While the company said that no GPU designs will be sent to China, the R&D center will focus on optimizing existing products, verifying chip designs and exploring use cases like autonomous driving, the report noted.

"We are not sending any GPU designs to China to be modified to comply with export controls," Nvidia told the publication.

Why It's Important: The move underscores Nvidia's delicate balancing act—maintaining a presence in one of its largest overseas markets while adhering to U.S. export controls.

China accounted for roughly 14% of Nvidia's revenue in 2023, or about $17 billion. Huang has said the market could be worth as much as $50 billion.

Huang previously warned that limiting access to China's AI market could harm not only Nvidia's business but also U.S. jobs and technological progress.

His remarks followed reports that Nvidia had notified major Chinese customers — including Alibaba Group BABA, ByteDance and Tencent Holdings TCEHY — that it is developing a modified version of AI chips to meet U.S. export restrictions.

Price Action: Nvidia shares slipped 0.096% to $134.70 in after-hours trading, according to Benzinga Pro.

According to Benzinga Edge Stock Rankings, Nvidia currently holds a growth score of 95.06%. Click here to see how it stacks up against top tech firms like AMD, Qualcomm, Alibaba and Tencent.