Nvidia’s CEO, Jensen Huang, recently voiced his worries about the growing strength of Chinese AI technology. This concern comes as U.S. export restrictions limit Nvidia’s ability to operate in the Chinese market. In a recent interview with Bloomberg Television, Huang discussed the company’s first-quarter earnings and the challenges posed by these restrictions.
Huang pointed out that U.S. companies are pulling out of China, and in their absence, Chinese firms are stepping up. He warned that these local companies are becoming quite powerful in the AI space. Nvidia expects to lose about $8 billion in sales this quarter due to these restrictions, which have effectively shut the company out of the Chinese market.
During the earnings call, Huang urged the U.S. government to reconsider these export restrictions. He believes they are not achieving their goal of keeping advanced AI technology away from China. Instead, he noted that Chinese companies, like Huawei, are finding ways to fill the gaps left by U.S. suppliers. Major customers, such as Tencent, are now turning to Huawei, which has made significant strides in the AI chip market.
Huang highlighted that the performance gap between U.S. products and Chinese alternatives is shrinking. He mentioned that Huawei’s latest AI chip competes closely with Nvidia’s H200 chip, which was once considered cutting-edge. Under current U.S. regulations, Nvidia cannot even ship its downgraded H20 chip to China, and further reductions in product capabilities are not an option.
Emphasizing the importance of the Chinese market, Huang acknowledged that it hosts the largest number of AI researchers in the world. He expressed a desire for developers globally to use American technology, while also recognizing that the Chinese market should not be underestimated, even as Nvidia enjoys recent successes in revenue.
Huang’s comments come amid broader discussions about AI technology and international competition, reflecting ongoing tensions between the U.S. and China in this critical sector.