This latest piece from GSR is genuinely important.

Why is Nvidia still courting China — almost clinging to it?

GSR frames it this way:

"For Nvidia, China is a monitoring window — a way to observe how massive AI infrastructure is actually evolving."

Nvidia's revenue exposure to China has collapsed from roughly 26% historically to around 5% today. And yet the reason Nvidia cannot easily walk away from China is not about revenue.

China's domestic AI chip competition is already fierce. Huawei Ascend, DeepSeek, Alibaba — China's homegrown AI ecosystem is no longer in the "chasing Western technology" phase. Under the pressure of sanctions, it has moved into genuine architectural experimentation and system-level optimization.

In other words, China is no longer simply a sales market for Nvidia. It is the single most important live laboratory for observing how large-scale AI infrastructure evolves outside the Nvidia stack.

GSR's argument, however, is that Nvidia's China organization is currently failing to execute on this strategic objective.

According to the author, Nvidia's people on the ground in China are not listening to real customer needs or running field-driven sales. Instead, they are leaning on abstract, academic-style lectures — behaving less like a commercial organization and more like a "club of scientists."

This is residual inertia from the era when Nvidia products sold themselves the moment they were available. If the core purpose of Nvidia's China strategy is intelligence gathering and on-the-ground learning, then the most important variable should be tight, two-way communication with customers. Yet Nvidia is failing to genuinely talk to the very market it is supposed to be observing. That is the fatal contradiction.

The problem is already showing up in Nvidia's recent failures in China.

The most representative case is the RTX 6000D. It was a hastily designed, downgraded GPU engineered to fit just under U.S. export control thresholds. According to GSR, Nvidia did not transparently communicate to its channel partners the critical missing specs — the absence of NVLink, the absence of HBM — that directly determined the product's competitiveness.

Instead, the company defaulted to its old assumption: "if it has an Nvidia logo on it, it will sell." Volume was pushed through on that premise.

The outcome was poor. Stripped of its competitive edge, the RTX 6000D was rejected by the market and ended up as massive dead inventory sitting on partners' books.

The author's broader point is that Nvidia's China problem is no longer just an export control problem. It is a listening problem — a signal that the sales model built on Nvidia's overwhelming market dominance simply no longer works in this environment.

An excellent read.
$NVDA

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