US Export Controls on AI Chips Fail, Says Nvidia CEO
Washington’s efforts to restrict China’s access to advanced artificial intelligence chips have backfired, according to Nvidia’s chief executive Jensen Huang. Speaking at a news conference in Taipei, Taiwan, Huang stated that the export controls imposed by the US government have inadvertently strengthened Chinese tech companies.
The regulations, driven by economic and security concerns, were introduced in 2022 under President Joseph R. Biden Jr. to curb the export of Nvidia’s most powerful chips to China. However, Huang claimed that these measures forced Nvidia to forfeit its dominant position in China, allowing domestic companies like Huawei to fill the gap.
“The export control was a failure,” Huang said, adding that Washington’s efforts gave Chinese companies “the spirit, the energy and the government support to accelerate their development.” Nvidia responded to the initial export controls by modifying one type of chip to make it less powerful and compliant with government performance thresholds. However, last month, the company disclosed that US officials were now requiring a license for future sales of those modified chips to China.
This regulatory shift forced Nvidia to take a $5.5 billion hit on inventory it had already planned to sell. Despite this setback, Huang’s comments highlight the unintended consequences of US export controls. While Huawei’s chips may not match Nvidia’s capabilities, they are sufficient to help Chinese companies provide AI services to individuals and businesses.
In recent months, the Chinese government has been actively promoting the use of domestically produced chips in data centers. This push, combined with the US export controls, has accelerated the development of China’s domestic chip industry, potentially weakening Nvidia’s long-term market position in the region.
