Chinese companies have reportedly ordered Blackwell chips worth $35 billion from Nvidia, according to Reuters. Nvidia's guidance excludes China sales, but one source says the company may fill only a fraction of the orders.
Reuters, citing anonymous sources, reported that Chinese companies, including ByteDance, Alibaba and Tencent, have ordered more than 3 million Nvidia Blackwell chips, collectively worth $35 billion. The news lands after a stretch in which Nvidia's stock fell by over 9%.
China sales sit outside Nvidia's guidance
The Trump administration told Nvidia in April 2025 that it needed an export license to keep selling data center chips to Chinese companies. CEO Jensen Huang then met with Trump on several occasions and lobbied Washington regulators, eventually striking a deal under which Nvidia would cede 15% of its Chinese chip sales to the government.
Even so, sales have hardly resumed because of reservations from both U.S. and Chinese regulators. CFO Colette Kress said in late August that less than 1% of data center revenue came from customers in China, and it was for older-generation Hopper 200 chips. She added that Hopper sales are dilutive to gross margins, so selling Blackwell chips to Chinese customers is positive.
Nvidia has also given forward guidance without potential Chinese sales. Kress projected third-quarter fiscal 2027 revenue of around $108 billion, which makes $35 billion a sizable figure by comparison.
Capacity may limit how much Nvidia can deliver
However, Reuters also reported that Nvidia may not fill all the orders because it had not planned for such production levels. One source told Reuters that Nvidia may only fill 5% to 10% of orders and can produce at most 3 million Blackwell chips globally in 2027.
Nvidia's stock traded only marginally higher as of 2:04 p.m. ET, while the market was broadly in the green.
Part of the muted reaction likely reflects Nvidia's roughly $5.2 trillion market cap and its guidance for 70% revenue growth in fiscal year 2028. Investors will want to learn the size of the orders, how much Nvidia can fill and how much of the sales it must cede to the government on its next earnings call.
Source: Motley Fool
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