(Annabelle Chih/Bloomberg via Getty Images)
Facing billions in lost sales, Nvidia CEO Jensen Huang is urging the US to let it sell AI chips to China, though he stopped short of directly criticizing President Trump.
The Trump administration has been trying to curb China's access to cutting-edge AI chips, so last month it restricted Nvidia from selling its H20 GPUs to the Chinese market. That means "the $50 billion China market is effectively closed to US industry," Huang said in an earnings call.
The downgraded H20 GPU was specifically designed to respect US export controls for China. But the White House’s crackdown means Nvidia expects to lose $8 billion in revenue during its fiscal second quarter. In Q1, the company also took a $7 billion hit from both a $4.5 billion expense charge and another $2.5 billion loss in revenue over the halted H20 sales.
In Wednesday’s earnings call, Huang said Nvidia can’t downgrade the AI chips further to comply with US export controls, although it's mulling potential alternatives to serve the Chinese market.
Even without China, Nvidia still saw huge AI chip demand, with the company’s revenue hitting $44.1 billion in fiscal Q1, up 69% from a year ago. Still, Nvidia’s CEO used yesterday's earnings call to criticize the US’s decision to effectively ban it from selling AI chips to China.
“Export controls should strengthen US platforms, not drive half of the world’s AI talent [China's AI researchers] to rivals,” Huang said, adding: “The question is not whether China will have AI. It already does. The question is whether one of the world’s largest AI markets will run on American platforms.”
His main worry is that US export controls will spur China-based companies to fill the void. “The US has based its policy on the assumption that China cannot make AI chips. That assumption was always questionable, and now it’s clearly wrong. China has enormous manufacturing capability,” Huang said.
However, Nvidia’s CEO refrained from criticizing Trump directly. “The president has a plan. He has a vision,” Huang said during the call, noting that Nvidia shares Trump's current push to bring more chip manufacturing to the US.
Outside of China, the White House has signaled it’ll permit advanced AI chips in a wider swath of foreign countries. Earlier this month, the Commerce Department rescinded a Biden-era “AI Diffusion Rule” that curbed chip exports, saying the policy “undermined US diplomatic relations with dozens of countries by downgrading them to second-tier status.”
In Wednesday’s call, Nvidia CEO said it's “really terrific” that the Trump administration rescinded the AI Diffusion rule. “President Trump wants America to win,” Huang said. “And he also realizes that we’re not the only country in the race. And he wants the United States to win. And recognizes that we have to get the American stack out to the world and have the world build on top of American stacks instead of alternatives.”