After Donald Trump, Nvidia CEO Jensen Huang now blames Joe Biden for the US chip crackdown, says it has backfired as China has accelerated chip development

Nvidia CEO Jensen Huang has raised an alarm, and this time, his complaint is directed at the Biden administration, as per a report. Addressing the Computex tech conference in Taipei, Huang cautioned that America's moves to hamper China's access to high-end AI chips have backfired, as China has accelerated its domestic AI growth, as per GuruFocus.

China’s Growing Domestic AI Chip Industry

Huang pointed out that rather than slowing China's AI plans, Washington's export controls have accelerated them, reported GuruFocus.

The CEO highlighted that, "Four years ago, we had 95% of the market in China. Now we're down to 50%," as quoted in the report.


Huang cited companies such as Huawei and other Chinese chipmakers, who have moved in to fill the gap, supported by government patronage and increased urgency, according to GuruFocus. He said, "They will use the second-best. Local companies are very determined," as quoted in the report.

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Nvidia's $5.5 Billion Loss

The effect on Nvidia has been brutal. Huang pointed out that, because of the Biden-era export controls on AI chips, the company was forced to cancel its China-tailored H20 chip, taking a $5.5 billion write-down, GuruFocus reported. As per the report, Huang did not mince words, labelling the reasoning behind the policy "fundamentally flawed".

Trump Administration’s Shift

Ironically, the Trump administration, which first escalated pressure on China with its own chip restrictions, now seems to agree with Huang, as per GuruFocus. The administration now has planned to reverse a proposed three-tier export licensing system, according to the report.

If the reversal occurs, it could lead the way for US chip companies such as Nvidia to export more AI technology overseas, provided that it's not to adversary countries, as per GuruFocus.

China Pushes Forward

While the United States is debating its approach, Beijing is going full speed ahead. China's tech titans such as Tencent and Alibaba are aggressively securing onshore chip supply contracts, consistent with the government's initiative to limit dependence on American technology, according to the report.

UAE Partnership With Nvidia

Even as Washington warns companies not to buy Chinese AI silicon, that may only be deepening the split, as per GuruFocus.

However, the United States is partnering with the UAE to build mega AI data centres by using Nvidia chips, according to the report.

GuruFocus wrote that "the real takeaway is this: trying to choke off China's access might have lit a fuse that's now burning faster than expected."

FAQs

What happened to Nvidia’s market share in China?
Huang stated that Nvidia’s market share in China has dropped from 95% to 50%, with local companies like Huawei stepping in to fill the gap, as per GuruFocus report.

How much did Nvidia lose because of export restrictions?
Nvidia had to cancel its H20 chip designed for China, resulting in a $5.5 billion write-down.