NVIDIA Corp. CEO Jensen Huang says the federal government’s export controls to curb sales of its artificial intelligence (AI) chips to China is a “failure,” echoing a chorus of those in the semiconductor industry.
“The local companies are very, very talented and very determined, and the export control gave them the spirit, the energy, and the government support to accelerate their development,” Huang said during a tech forum in Taipei on Wednesday. “I think, all in all, the export control was a failure.”
NVIDIA is feeling the pinch from U.S. chip restrictions on the sale of advanced semiconductor technology, especially those used in AI, dating to the Biden administration in 2022 to limit China’s military advancement and protect America’s lead in AI.
Last month, NVIDIA reported a $5.5 billion write-down to its inventory after the federal government mandated companies get a license to sell their AI chips to China.
Huang and leaders of other U.S.-based chip designers have lobbied against chip controls as they worry about losing lucrative business deals. At the annual COMPUTEX technology trade show in Taipei this week, he said NVIDIA’s GPU market share in China fell to 50% from 95% over the past four years. In fact, the curbs have spurred the Chinese into ramping up development in AI and supercomputing, he added.
“AI researchers are still doing AI research in China,” Huang said Wednesday. “If they don’t have enough NVIDIA, they will use their own.” Huang said NVIDIA will do everything it can to keep selling AI chips in China. If anything, he said, the U.S.’s efforts gave Chinese companies “the spirit, the energy, and the government support to accelerate their development.”
Chip experts, meanwhile, said the chip limits are hurting U.S. businesses more than helping the country.
“The effects of the controls are twofold. They have the impact of reducing the ability of U.S. companies to access the China market and, in turn, have accelerated the efforts of the domestic industry to pursue greater innovation,” Paul Triolo, senior vice president for China at DGA Group, told CNBC. “You create competitors to your leading companies at the same time you’re cutting them off from a massive market in China.”
