As Nvidia prepares to unveil its quarterly earnings on Wednesday, a silver lining is emerging amid the cloud of U.S. export restrictions that have cost the company access to billions in potential Chinese sales. While CEO Jensen Huang recently revealed Nvidia has forfeited approximately $15 billion in China business due to Trump administration chip curbs, regulatory modifications could open significant new markets in the Middle East and beyond.
The timing of these developments is crucial for Nvidia, which expects to record $5.5 billion in charges related to restrictions on its H20 chip—the only AI processor it was permitted to sell in China until recent clampdowns. Analysts project the company’s adjusted gross margin will drop more than 11 percentage points to 67.7%, with Wedbush estimating the write-downs could translate to a gross margin hit of up to 12.5%.
Despite these challenges, Nvidia has secured promising new opportunities, including an agreement to sell hundreds of thousands of AI chips to Saudi Arabia. This deal, part of President Trump’s trade arrangements with Gulf countries, includes 18,000 of Nvidia’s cutting-edge “Blackwell” chips destined for a startup owned by Saudi Arabia’s sovereign wealth fund. While analysts caution that revenue contributions from the Middle East will be relatively small in the near term, these new markets could help offset some of the substantial losses from China, which represented 13% of Nvidia’s revenue last year.