Taipei, Taiwan — Nvidia CEO Jensen Huang has sharply criticized U.S. restrictions on exporting advanced computing chips to China, calling the policy a “failure” that is hurting American businesses more than its intended targets.

Speaking at the annual Computex tech conference in Taipei, Huang didn’t mince words when describing the fallout from U.S. export controls. “The fundamental assumptions that led to the AI diffusion rule in the beginning have been proven to be fundamentally flawed,” Huang told reporters.

Nvidia’s Market Share in China Cut in Half

Huang pointed to the dramatic drop in Nvidia’s market share in China as a direct consequence of these restrictions. Once commanding 95% of the Chinese market for advanced chips, Nvidia now holds just 50%. The CEO said that rather than slowing China’s tech ambitions, U.S. policies have fueled a push for self-reliance, with Chinese companies ramping up investment in domestic semiconductor development.

U.S. Policy Shift Sparks Debate

The criticism comes just days after the Trump administration announced it would scrap some of the Biden-era rules that had imposed blanket bans on exports to China. While that move is expected to open the door for new AI deals with countries like Saudi Arabia—deals Nvidia is already eyeing—it also comes with tighter restrictions elsewhere.

Under the revised strategy, the U.S. will still restrict advanced technology exports to dozens of entities, most of them based in China. This includes new licensing rules for specific Nvidia chips and warnings to U.S. firms about using Chinese-made components from companies like Huawei.

Tech vs. National Security: A Growing Divide

Huang’s remarks tap into a broader debate in Washington: how to balance national security with economic competitiveness. Both the Trump and Biden administrations have cited military risks in justifying tech export controls. However, many in the business community argue these rules often end up isolating U.S. companies and encouraging global buyers to look elsewhere.

While former President Trump has championed aggressive trade measures, including sweeping tariffs, he has shown more flexibility with the tech industry—particularly as it played a key role in backing his reelection campaign.

During a recent Middle East tour, Trump touted the loosening of chip export restrictions as a win for American innovation, positioning companies like Nvidia to strike lucrative international deals.

Beijing Fires Back

The U.S. moves have not gone unnoticed in China. In response to the latest crackdown, Beijing accused Washington of violating the trade framework both sides had tentatively agreed upon during negotiations in Switzerland earlier this month.

Chinese officials argue that America’s shifting rules are undermining trust and further destabilizing global tech supply chains.

Bottom Line:

Jensen Huang’s blunt assessment underscores growing frustration in Silicon Valley over how U.S. chip policies are being handled. As global tech competition heats up, the battle over who controls the future of semiconductors is far from over—and American firms may be caught in the middle.

Source: BBC – Nvidia boss calls US chip policy a ‘failure’

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China has launched an antitrust investigation into Nvidia, the world’s largest chipmaker for artificial intelligence (AI), marking a significant escalation in the ongoing tech rivalry between China and the United States. According to Chinese state media, the probe is part of a broader struggle for AI dominance, a key area both nations see as essential to their national security.

The Chinese government is examining Nvidia’s 2020 acquisition of Israeli networking company Mellanox, which it believes may violate antitrust laws, though specific details about the potential breach have not been disclosed. Despite the investigation, Nvidia’s acquisition was initially approved by China in 2020.

In response to the news, Nvidia’s stock fell less than 2% in premarket trading, but the company remains one of the hottest stocks on the market, having surged nearly 200% this year due to the AI boom. With a market value exceeding $3 trillion, Nvidia is second only to Apple in terms of market capitalization.

This probe is the latest chapter in the intensifying China-US chip war. Just last week, the Biden administration imposed a new round of export restrictions on high-tech memory chip sales to China, aiming to slow down China’s development of AI technology. While memory chips differ from the graphics processors Nvidia makes, both are crucial components for powering AI. This marks the third such round of restrictions, with the US government concerned that China could leverage AI for military advantages.

In retaliation, China’s Commerce Ministry criticized the US restrictions, claiming they pose a significant threat to global supply chain stability. To counteract the impact, China recently tightened its export ban on critical materials like germanium and gallium, which are essential for chip manufacturing. Previously, China had allowed some of these sales through loopholes, but these have now been closed.

Tensions are further exacerbated by accusations from senior US officials that China has been stealing American AI software—a claim Beijing denies.

The investigation into Nvidia intensifies the stakes in this tech battle. Nvidia, a key player in the AI revolution, could face significant setbacks if the probe undermines its business. In addition to the scrutiny from China, the company is also under antitrust investigation in the US.

Both nations are also doubling down on efforts to develop their own semiconductor industries. The Biden administration has invested billions through the CHIPS Act to boost domestic chip production, aiming to reduce reliance on China and other foreign suppliers. Meanwhile, China has announced a massive $47.5 billion state investment fund to advance its semiconductor manufacturing capabilities, marking the largest such fund in the country’s history.

As the chip war continues to escalate, both China and the US are positioning themselves to secure a technological edge, with AI and microprocessors at the heart of their competition.

Source

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