TechCheck Nvidia's Chip Diplomacy and Concentration Risk 8/28/25
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Aug 28, 2025 The CEO of Nvidia is advocating for 'GPU panda diplomacy' to ensure American AI chips reach China while asserting independence from the Chinese market. Surprisingly, three major clients now make up 56% of Nvidia's accounts receivable, raising concerns about concentration risk. Despite strong financials, there's a noticeable decline in shares reflecting this dependence. Additionally, the discussion touches on the evolving dynamics between hyperscalers and their clients, highlighting the urgent need for diversification as semiconductor demand continues to rise.
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GPU 'Panda' Diplomacy Works Both Ways
- Jensen Huang is lobbying Washington to allow U.S. AI chips into China while showing Nvidia can succeed without Beijing.
- If export rules ease, China could become a massive tailwind for Nvidia's growth.
China Is A Huge Revenue Lever
- Management says lifting export controls could add $2–5 billion in quarterly revenue from H20 chips alone.
- China represents a vast addressable market that could greatly accelerate Nvidia's already strong position.
Customer Concentration Is Structural Today
- Nvidia disclosed three customers now account for 56% of accounts receivable, raising concentration concerns.
- That concentration may reflect current supply bottlenecks and the reality that only a few can buy GPUs at scale.