Nvidia CEO Jensen Huang called U.S. export controls on artificial intelligence chips to China under the Biden administration’s AI diffusion rule a “failure” that risks ceding the $50 billion Chinese AI chip market to rivals like Chinese tech giant Huawei.
Huang delivered a keynote speech at Computex in Taipei, Taiwan, earlier today in which he said, “All in all, the export control was a failure,” adding, “The fundamental assumptions that led to the AI diffusion rule in the beginning, in the first place, have been proven to be fundamentally flawed.”
Huang was referring to the Biden-Harris regime era, where the U.S. blocked sales of advanced AI chips to China, which only forced companies to buy advanced chips from its competitor, Huawei. This also sparked a domestic wave of investment to build out supply chains for advanced AI chipmaking to reduce reliance on outside manufacturers.
He said China alone will account for a $50 billion opportunity in 2026, warning that if U.S. tech companies were still cut off from the Chinese market, this would only suggest that local players would buy from competitors.
“China has 50% of the world’s AI developers, and it’s important that when they develop on an architecture, they develop on Nvidia, or at least American technology,” Huang pointed out.
Huang praised President Trump’s move to scrap the previous administration’s AI diffusion rule: “President Trump realizes it’s exactly the wrong goal.”
Under the Biden administration, Nvidia’s China market share collapsed from 95% to 50%.
Last week, Huang joined President Trump on a Gulf States tour that resulted in massive Blackwell deals for Nividia in Saudi Arabia.
Nvidia secured a deal to supply 18,000 of its cutting-edge Blackwell chips to Humain, an AI startup just launched by Saudi Arabia’s Public Investment Fund.
Huang stated last week:
“There’s no evidence of any AI chip diversion. These are massive systems. The Grace Blackwell system is nearly two tons, and so you’re not going to be putting that in your pocket or your backpack anytime soon.
“The important thing is that the countries and the companies that we sell to recognize that diversion is not allowed and everybody would like to continue to buy Nvidia technology. And so they monitor themselves very carefully.”
“With the AI Diffusion Rule revoked, America will have a once-in-a-generation opportunity to lead the next industrial revolution and create high-paying U.S. jobs, build new U.S.-supplied infrastructure, and alleviate the trade deficit,” an Nvidia spokesperson told The Wall Street Journal last week.
Reuters noted, “Trump administration officials are weighing discarding the tiered approach to chip export curbs and replacing it with a global licensing regime with government-to-government agreements, which could give the U.S. clout in trade talks.”
Given that the Biden-era AI diffusion rule was a “failure,” in the words of Nvidia’s CEO, one might question whether the policy ultimately benefited Chinese firms by sidelining Nvidia and allowing local competitors to gain market share.
Looking ahead, Nvidia will report earnings on Wednesday.
Tyler Durden
Wed, 05/21/2025 – 07:20
