Nvidia's Twin Fronts: Industrial Alliances in Asia and a China Revenue Void

Nvidia chief Jensen Huang spent Monday in Seoul forging alliances with Hyundai and LG that push the chipmaker’s technology deeper into factories, cars and humanoid robots. Yet even as these partnerships open a fresh industrial frontier, the company faces an equally stark reality: its once-lucrative China business is all but gone. The stock, which has gained roughly 45–46% over the past twelve months, now trades between €180.92 and €181.86, straddling both promise and peril.

Hyundai chairman Euisun Chung and Huang laid the groundwork for a partnership centred on the automaker’s multibillion-dollar Saemangeum project, a sprawling complex spanning more than one million square metres. The site will house an AI data centre and a robotics manufacturing cluster. Through its subsidiary Boston Dynamics, Hyundai is also pushing ahead with humanoid systems that will rely on Nvidia’s technology as their “brain.” On the same day, Nvidia signed up LG Electronics for a joint AI factory that will supply computing power for autonomous vehicles and cloud services. LG is already testing Nvidia’s Isaac GR00T platform for future home robots, while LG CNS, the industrial arm, integrates the same software into its own robotic systems. Physical AI, once a conceptual buzzword, is becoming a tangible business.

The expansion in South Korea unfolds against a background of intensifying geopolitical scrutiny. Huang recently declined an invitation from Senator Elizabeth Warren to testify before the Senate Banking Committee on AI, China and US technological supremacy. Warren fired back, insisting the public deserves answers in an open forum. Behind the political theatre lies a concrete headache: a report from short-seller Culper Research alleges that more than 20% of Nvidia’s computing revenue in fiscal 2026 flows from China, routed through illegal chip diversions via Southeast Asian intermediaries. Nvidia has denied the claims, but US authorities have uncovered alleged circumvention schemes worth over $670 million in recent months, including shipments of H100 and H200 chips through Malaysia and Thailand.

Should investors sell immediately? Or is it worth buying Nvidia?

Export controls have tightened dramatically. In January 2026, the US Commerce Department imposed case-by-case reviews on H200 chip exports rather than blanket denials, demanding delivery guarantees and independent security audits. The approval process has stalled. Meanwhile, Chinese authorities have blocked imports and warned domestic companies against buying US AI technology. Huang conceded recently that “we have effectively ceded the Chinese AI chip market to Huawei.” Industry data from IDC bears this out: Nvidia’s share of AI accelerator cards in China fell from nearly 95% in 2025 to just 55%, while Huawei’s local chips now account for 20%. For the second quarter of 2027, Nvidia projects no revenue from China at all – a market that once contributed nearly a quarter of its data-centre sales.

A powerful counterweight has emerged in the form of “sovereign AI.” Demand for state-funded, locally controlled data centres has tripled over the past year, as countries such as Britain, Japan and Saudi Arabia build their own infrastructure to retain data sovereignty and cultural oversight. For Nvidia, that translates into roughly $30 billion in revenue in fiscal 2026 – nearly 14% of total business. The company now sells complete, turnkey AI factories that can be deployed in 90 days, locking customers into its CUDA software stack. The switching costs are immense: rewriting thousands of lines of code to move to AMD or Intel is not a realistic option for most operators.

On the technical side, the stock has stabilised after a 5% weekly setback, holding above its 50-day moving average of €175.58. Annualised volatility over the past 30 days stands at 43%, reflecting the tug of war between bullish long-term bets and near-term uncertainty. Analysts remain broadly constructive, with a consensus price target of €258.62 – roughly 43% upside from current levels. But the market is pricing in a risk premium that no model can fully capture: China has not disappeared; it has simply gone underground.

The strategic breadth of the new Korean pacts signals that Nvidia is positioning itself for life beyond the pure data-centre boom. The move into factory floors opens a multibillion-dollar opportunity that could sustain growth for years. Yet until Washington resolves its export-control puzzle, the company’s largest former market will remain an invisible drag on sentiment – a hidden discount that every buyer of Nvidia shares must now accept.

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