Nvidia has achieved record revenue as artificial intelligence demand accelerates, even as international politics threaten its expansion.
On Wednesday, the Santa Clara chipmaker reported $46.7bn (£34.6bn) in second-quarter revenue, a 56% increase from the same period in 2024.
Despite the strong performance, shares slipped in after-hours trading after executives admitted the company was still “working through geopolitical issues.” Nvidia remains caught in the trade dispute between Washington and Beijing.
Rapid policy changes under the Trump administration, designed to protect US leadership in artificial intelligence, add further uncertainty for the company.
Tech giants drive AI growth
Nvidia’s chips remain central to the global artificial intelligence boom.
The company highlighted robust demand from Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both firms are rapidly expanding their AI infrastructure.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four major technology firms had doubled annual spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We provide the infrastructure powering that growth.”
Analysts note Nvidia’s dominant position in the AI chip market. Colleen McHugh, chief investment officer at Wealthify, called the firm “the driving force behind the AI boom.”
She stressed that Nvidia relies heavily on continued investment from tech giants. If spending continues, she said, revenue and share prices will keep rising.
Data centre revenue rose 56% to $41.1bn but slightly missed analyst expectations. Investor Eileen Burbridge, founding partner of Passion Capital, said this weaker performance triggered the “share price wobble.”
Even so, she praised Nvidia’s growth as “unbelievable” while warning that excessive enthusiasm could create a bubble.
In July, Nvidia became the world’s first $4trn company. The firm now expects $54bn in revenue for the current quarter, exceeding Wall Street forecasts.
Geopolitics challenge Nvidia
Despite record-breaking results, Nvidia faces mounting political risks.
In July, the company announced plans to resume sales of high-end AI chips to China. The move followed lobbying from Huang, who persuaded the Trump administration to reverse its ban on the H20 chip, designed for Chinese clients.
The ban had been imposed amid concerns the chips could support China’s military and domestic AI development.
Executives confirmed that by late July, US officials began reviewing licenses for H20 sales. Some Chinese clients received approvals, but Nvidia has not shipped any chips.
The US government expects to collect 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is accelerating efforts to expand its semiconductor industry. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s long-term role as “the bellwether of the AI economy” may depend on whether its robotics expansion secures lasting leadership.
