Nvidia CEO Jensen Huang has criticized U.S. chip export controls as a ‘failure,’ warning that the restrictions are harming American businesses more than China. Speaking at Computex, an artificial intelligence trade show in Taiwan, Huang revealed that the policies have significantly reduced Nvidia’s China market share from 95% to 50%. This dramatic decline has not only impacted Nvidia’s market presence but has also accelerated China’s efforts to develop its own advanced chips.
Huang’s comments come amid a delicate truce between the U.S. and China over tariffs and semiconductors. The Chinese Commerce Ministry responded to recent U.S. policy changes by labeling them ‘overreaching’ and ‘bullying,’ demanding that the White House correct its mistakes. The ministry accused the U.S. of unjustifiably restricting Chinese chip products and interfering with Chinese companies’ use of domestically produced chips within China.
U.S. Policy Shifts and Nvidia’s Position
The White House has since scrapped the tiered ‘AI Diffusion Rule’ introduced by former President Joe Biden in January, promising to replace it fully in the future. Nvidia finds itself caught in the middle, with Huang maintaining relationships with both the U.S. and China in the escalating tech cold war. Huang accompanied President Donald Trump on a Middle East trip, where Trump praised Nvidia’s massive AI investments. However, Huang has also kept close ties to China, praising the country’s tech capabilities and committing to ‘unswervingly serve the Chinese market.’
Balancing Act and Future Implications
Nvidia is currently acquiring a new space for its employees in Shanghai, though the company insists it’s not transferring any intellectual property or GPU designs there. Huang has warned lawmakers in Washington that China is quickly gaining ground on the U.S. in AI, stating, ‘China is right behind us… We are very close. Remember this is a long-term, infinite race.’ He specifically highlighted Huawei’s advancements in computing and network technology, essential for AI development.
Huang’s warning is clear: if the U.S. doesn’t reassess its approach to chip export controls, it risks losing both the Chinese market and its edge in the global AI race. Nvidia continues to balance its relationships with both nations, reshaping its chips to stay compliant with regulations while navigating the commercial and political fault lines.
Conclusion
The situation underscores the complex geopolitical dynamics at play in the tech industry, particularly in the AI sector. As the U.S. and China continue to navigate their technological rivalry, companies like Nvidia must carefully manage their relationships with both nations to remain competitive in the global market.
