Nvidia(NVDA) investors have no shortage of reasons to remain bullish.
The AI chipmaker posted record revenue of $81.6 billion for the first quarter of fiscal 2027, up 85% from a year earlier. Data center revenue surged 92% to $75.2 billion. Nvidia forecast second-quarter revenue of about $91 billion and gross margins of about 75%.
That outlook has one glaring exception: Nvidia assumes there will be no Data Center computing revenue from China.
For now, the company is growing strong enough to absorb that lost business. But a new White House allegation about Chinese startup Moonshot AI points to a risk that could extend beyond China.
Moonshot purchased servers equipped with Nvidia’s GB300 processors and deployed them in Thailand, probably to train AI models, according to Michael Kratsios, director of the White House Office of Science and Technology Policy, as CNBC reported.
The claim had not been independently verified, said CNBC. Its report did not charge Nvidia with knowingly violating U.S. export controls.
The question for shareholders is not whether Moonshot will reduce demand for Nvidia chips. It’s whether the row will spur Washington to regulate data centers abroad, cloud providers, and remote users of Nvidia hardware.
That could turn a China sales problem into a wider global compliance issue.
Nvidia’s earnings show demand is not the problem
Nvidia’s recent results show the strength of the underlying investment thesis.
Net income for the quarter was $58.3 billion, and diluted earnings per share increased 214% from a year ago to $2.39. Data Center sales represented more than 90% of total revenue.
Nvidia’s official earnings release also suggests the company expects around 12% revenue growth quarter over quarter, excluding China Data Center computing sales from its forecast.
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Those numbers suggest that the Moonshot report is not an immediate earnings threat. Instead, the risk is in the potential second-order effects.
In its most recent statement with the Securities and Exchange Commission, Nvidia said it is effectively unable to compete in China’s Data Center computing market in the current regulatory environment.
The company cautioned that its absence might allow competitors to build bigger consumer and developer ecosystems, possibly threatening Nvidia in other areas. It also claimed that the lost opportunity could have a material impact on its company and financial results.
“We were effectively foreclosed from competing in China’s data center computing/compute market,” Nvidia said in its quarterly filing.
Moonshot could expand Nvidia’s regulatory exposure
The Moonshot disagreement is important since the reported access took place in Thailand, not China.
Export regulations have typically been concerned with who buys a chip and where it goes. Remote computing enables a corporation to use modern hardware without having to physically import it.
Congress is already thinking about laws to try to close the gap.
Key takeaways for Nvidia stock
- AI demand remains Nvidia’s primary earnings driver.
- China Data Center sales are already excluded from current guidance.
- Remote-access controls could affect customers outside China.
- Tighter monitoring could raise compliance and deployment costs.
- Nvidia’s absence from China could strengthen competing chip ecosystems.
The Remote Access Security Act would give the federal government the specific authority to regulate remote foreign access to controlled U.S. technology. The House passed the bill 369-22 in January and sent it to the Senate Banking Committee.
And the White House’s AI Action Plan proposes to leverage location-verification features in advanced chips and ramp up monitoring in areas deemed vulnerable to diversion.
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For Nvidia, the restrictions could involve more stringent customer vetting, monitoring of use, and partnerships with cloud and data-center providers.
The Commerce Department has already made compliance a condition of some purchases from China.
It has a January licensing policy that allows case-by-case consideration of applications for exports of the H200, provided that buyers implement customer-screening and other security measures.
The takeaway for Nvidia investors
The Moonshot assertion is a double-edged sword for Nvidia shareholders.
The positive argument is that China’s apparent effort to buy access to GB300 demonstrates how valuable Nvidia’s tech is.
Each GB300 NVL72 has 72 Blackwell Ultra GPUs and 36 Grace central processing units. Nvidia says it can deliver up to 50 times the AI factory output of Hopper-based platforms.
Moonshot claims its Kimi K3 model has 2.8 trillion parameters and enables a context window of one million tokens, according to the BBC. Such are Moonshot’s criteria, but they hint at the amount of computing Chinese developers are seeking.
The negative take is that it’s getting difficult to market and deploy the finest of Nvidia’s products globally.
The immediate risk to the stock is not an earnings collapse. Investors consider increased compliance expenses, less open markets, and tougher rivals from China, so the regulatory discount is bigger.
Nvidia’s expansion is drowning out those concerns. Investors should watch whether Washington sticks to Moonshot or expands into laws governing Nvidia systems globally.
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