James Kynge

Well, I'm pivoting from our conversation completely this week.

My prediction is about the chip wars.

Last week, the U.S.

gave formal green light to NVIDIA to sell its H200 chips to China.

That was lifting a previous ban imposed by the U.S.,

But Chinese officials who have been speaking to media reporters on condition of anonymity have said that the NVIDIA H200 chips will not be permitted to enter China.

So the U.S.

gives the green light, China gives the red light.

My prediction is that this game of cat and mouse will continue for most of this year.

And I think it shows something fundamental about the chip wars between the U.S.

and China, and that is that China is catching up with the U.S.

in chip technology.

In fact, in 2026,

it's going to be a horrible year for NVIDIA sales in the China market.

That's because Chinese companies like Huawei, Cambricon, MoreThreads, we've mentioned all of those in previous episodes, are now producing chips that, if combined into superclusters, can compete with NVIDIA superclusters on performance.

So...

To get down to brass tacks, my prediction is that NVIDIA's market share for AI processors in China will crater this year.

They will fall very, very sharply.

I'm not exactly sure how big a fall we're talking about, but in 2024, they had 66% of the market.

This year, I reckon they could fall to below 20% of the market.