China’s Regulatory Shift Sparks Optimism for Nvidia’s AI Prospects
01.02.2026 - 12:39:04
Market sentiment surrounding Nvidia received a dual boost over the weekend, stemming from strong denials of partnership troubles by its CEO and a significant, unexpected development in a key geopolitical market.
Early Friday, a report from the Wall Street Journal suggesting a planned $100 billion infrastructure partnership with OpenAI had been paused triggered brief market unease. Nvidia’s Chief Executive, Jensen Huang, addressed these claims directly on Saturday in Taipei, dismissing them as "nonsense." Huang confirmed the strategic alliance remains fully intact and that Nvidia intends to participate in OpenAI’s upcoming funding round. He provided crucial context, clarifying that the referenced $100 billion figure pertains to the long-term total value of the infrastructure initiative, not an immediate single investment.
A Pivotal Opening in the Chinese Market
Potentially more consequential for Nvidia’s fundamental outlook is a separate weekend development from China. According to emerging reports, Chinese regulators have granted conditional approval for the import of Nvidia’s advanced H200 AI chips. Major technology firms including Alibaba, Tencent, and ByteDance, alongside AI startup DeepSeek, are among the companies set to benefit.
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The H200 chips are considered vital for training large language models (LLMs) due to their superior memory bandwidth. Market analysts interpret this "controlled opening" as a signal that Beijing is prioritizing the pace of AI development. This regulatory shift could unlock substantial pent-up demand for Nvidia’s hardware, which had previously been constrained by export controls and licensing bottlenecks.
Wall Street Maintains a Bullish Stance
Even prior to these developments, analyst sentiment was positive. Wolfe Research raised its price target for Nvidia to $275 on Friday, reaffirming its "Outperform" rating. The firm cited robust demand for complete data center systems and improvements in the supply chain as key drivers for its optimistic assessment.
Nvidia’s shares closed at $192.65 on Friday, trading within close range of their 52-week high. The sustainability of this positive momentum and the tangible financial impact of the China development will become clearer when the company reports its quarterly earnings on February 25, 2026.
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