Nvidia just posted fiscal Q2 2027 results that tell a very clear story: the company that once earned the lion’s share of its AI chip revenue from Chinese buyers has effectively replaced that entire market with domestic demand. Total revenue hit $96.2 billion, up 106% year-over-year, and almost none of that growth came from China.
Revenue from China, including Hong Kong, came in at $7.88 billion. That’s roughly 8% of total revenue, a fraction of where it once stood. For context, CEO Jensen Huang has acknowledged that Nvidia’s market share in China for advanced AI chips went from approximately 95% to essentially zero.
The numbers behind the pivot
Data Center revenue, the segment that matters most for Nvidia’s AI narrative, reached $89 billion in the quarter, growing 117% year-over-year. US hyperscalers, the cloud giants building out AI infrastructure at staggering scale, are doing the heavy lifting here.
Three US customers alone accounted for 54% of Nvidia’s total revenue in Q2. Shipments of H200 AI chips to Chinese companies represented less than 1% of Data Center revenue.
The prior quarter told a similar story. In Q1 FY2027, China revenue fell 53% year-over-year to $4.55 billion, while US customers represented around 78% of total sales.
Why China dried up
US export controls on advanced semiconductors to China have systematically cut off the company’s access to what was once a major revenue source. At the same time, domestic competitors like Huawei have moved aggressively to fill the gap left by restricted American chip sales.
Nvidia’s Q3 FY2027 guidance projects revenue of $108 billion for the quarter while explicitly excluding any contributions from Data Center compute sales in China.
What this means for the semiconductor landscape
Nvidia has demonstrated that AI demand from US and allied markets is so enormous that it can more than offset the loss of a market that once contributed a far larger share of revenue. Growing 106% year-over-year while your second-largest geographic market collapses is a feat that few companies in any sector could pull off.
When 54% of your revenue comes from three customers, and roughly 78% comes from a single country, diversification is only happening in one direction. Nvidia has reduced its China dependence, but it has increased its dependence on a handful of US hyperscalers.