CNBC’s Kristina Partsinevelos joins 'Money Movers' to discuss potential headwinds for Nvidia GPUs in China.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Nvidia has indicated that it does not expect significant revenue from its H20 AI chips in China until later in the year, citing ongoing challenges such as pending export licenses and canceled orders. The company has written down $4.5 billion in inventory and faces a lengthy supply chain process, with most existing inventory not yet in finished form.

Analysts note that Nvidia's H20 chips will not contribute to revenue this quarter, and only limited upside is expected in the following quarter as supply ramps up. While Nvidia expects long-term recovery in China, with annual revenue projections between $10 and $15 billion, this is lower than previous estimates. Newer, more affordable GPUs built on Nvidia's Blackwell architecture may gain traction in China, further complicating the revenue outlook.

Nvidia GPUs face headwinds in China

So, shares of NVIDIA are up about 5% since the company said it expects to resume sales of its AI chips in China, but that might not restart the sales as quickly as some investors are betting on. Christina Partsenevelis has more in today's Tech Check segment. So, when can we expect it, Christina? Well, NVIDIA isn't expecting any meaningful H20 revenue from China until late this year. The company said last week it likely won't see a steady sales cycle for this particular chip, which is geared for China, until after the October quarter. That's because there are still a lot of roadblocks. You have export licenses that haven't been granted just yet. Most earlier orders were canceled, and the company wrote down about $4.5 billion in inventory with very little product ready to actually ship right now. Morgan Stanley notes that even restarting production will take some time, since a lot of the inventory wasn't actually finished chips. It was just work in progress. And NVIDIA's supply chain takes roughly nine months from wafer to the actual system that they can sell to customers. And so here's what that means. Don't expect the H20 chips, those again for China, to contribute anything this quarter. Zero in July, according to Piper Sandler. And only limited upside next quarter as the company ramps supply and reconnects with customers in China. Longer term, though, NVIDIA does expect China revenue to recover, potentially contributing anywhere between $10 and $15 billion annually. That stat is according to Bernstein. And making up a low teens percentage of total sale. But that's likely lower than some of the earlier projections of $20 billion, which now look overly optimistic, given that longer time frame and regaining those customer orders. And the landscape is already shifting. NVIDIA's newer RTX chips built on their Blackwell architecture, which is the latest architecture, are expected to gain traction in China over time. These aren't direct replacements for the H20 chips, but they're more affordable, export-compliant GPUs designed specifically for graphics and video workloads, according to NVIDIA's CFO. And that could really speed up the transition away from copper, the H20s, and really complicate the revenue mix further. Bottom line, though, that's all confusing. China rebound is coming, but investors shouldn't really count on it showing up in the numbers until late this year, Q4, at best, Carl.

The next set of peace talks between Ukraine and Russia - the first meeting in seven weeks - is planned for Wednesday in Turkey, President Zelenskyy quoted the head of Ukraine's National Security and Defence Council as saying.

Kyiv

Ukraine Invasion

Zelenskyy says new peace talks planned for Wednesday

A sweeping cyber espionage operation targeting Microsoft server software 'SharePoint' compromised about 100 different organizations as of the weekend, two of the organizations that helped uncover the campaign said on Monday (July 21).

Redmond

Microsoft server hack hit about 100 organizations, experts say

Protestors showed up at the federal courthouse in Boston on Monday amid Harvard's $2 billion legal battle with the Trump administration.

Boston

Protestors gather outside courthouse amid Harvard-Trump hearing

Malcolm-Jamal Warner, an actor and artist who rose to fame as a child as Theodore Huxtable on “The Cosby Show,” has died in a drowning accident in Costa Rica, where he was on vacation with his family, according to a source close to the actor.

Los Angeles

‘The Cosby Show’ star Malcolm-Jamal Warner dead at 54

An off-duty U.S. Customs and Border Protection agent was shot after an apparent robbery went wrong in New York, officials say. New York Mayor Eric Adams said a 21-year-old undocumented immigrant was taken into custody. The agent is in stable condition and is expected to survive.

New York

Off-duty Border Patrol agent shot in NYC by undocumented migrant

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Dhaka

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Muan-gun

Report says pilot shut wrong engine before Jeju Air crash

Iran, China and Russia will discuss Tehran's nuclear activities and sanctions on Tuesday, with the E3 nations set for talks on Friday amid threats of reimposing sanctions.

Tehran

Iran to consult with Russia, China ahead of European nuclear talks

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As Suwayda

Bedouin civilians evacuate Syria's Sweida as tense truce holds

Japanese Prime Minister Shigeru Ishiba vowed to remain in office on Monday after his ruling coalition suffered a bruising defeat in upper house elections, prompting some of his own party to deliberate his future as the opposition weighed a no-confidence motion.

Tokyo

Japan PM Ishiba vows to stay on after bruising election defeat

Police say Fernando Ramirez drove onto a crowded sidewalk outside a Los Angeles nightclub early Saturday, injuring dozens. He was later shot by a bystander who fled the scene, prompting a citywide search.

Police search for gunman after car-ramming attack in L.A.

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Japan's ruling coalition loses control of upper house

Iran's foreign minister has said the country France, Germany and the UK are looking to set a date for a meeting for nuclear talks, in what could be a step toward ending the protracted impasse over Iran's nuclear programme and Western concerns.

Middle East Conflict

Iran and three European powers set to resume nuclear talks

The Trump administration said on Saturday (July 19) it will take action against Mexico under its "America First" policy, saying the Mexican government's earlier decision to cut flight slots in Mexico City, which affects U.S. airlines, violates a bilateral air agreement.

Washington

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U.S. President Donald Trump has sued the Wall Street Journal and its owners including Rupert Murdoch for at least $10 billion, over the report that his name was on a 2003 birthday greeting for Jeffrey Epstein that included a sexually suggestive drawing and a reference to secrets they shared.

Trump sues Wall Street Journal for $10 billion over Epstein report

Over 200 Venezuelans who were deported from the U.S. on allegations of gang membership earlier this year and detained in an El Salvador jail have arrived home to Caracas as part of a coordinated prisoner exchange. Ten Americans held in Venezuela returned to the U.S., officials said.

Caracas

El Salvador sends detained Venezuelans home in swap for Americans

Japanese voters headed to the polls on Sunday (July 20) in a tightly contested upper house election that could unleash political turmoil, with rising prices, immigration concerns and the emergence of a Trump-style "Japanese-first" party threatening to weaken Prime Minister Shigeru Ishiba's grip on power.

Japan heads to the polls for Upper House elections

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Damascus

Syrian interim president urges respect of ceasefire in Sweida clashes

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Zelenskyy proposes new round of peace talks with Russia

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Epstein’s ex-girlfriend describes alleged incident with Trump

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West Hollywood

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Hạ Long Bay

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Rio de Janeiro

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The UK's Labour Party has passed a landmark electoral reform, aligning with Scotland and Wales in lowering the voting age from 18 to 16. The change fulfills a key promise by the ruling party but garnered criticism from the Conservative Party.

London

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Nvidia GPUs face headwinds in China

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