Nvidia CEO Expresses Disappointment as China Restricts AI Chip Imports

Nvidia CEO Jensen Huang expresses disappointment after reports that China has banned the use of the company's artificial intelligence (AI) chips. The Financial Times reveals that the Cyberspace Administration of China has ordered domestic tech firms, including ByteDance and Alibaba, not to purchase Nvidia's RTX Pro 6000D chip.

"We can only be in service of a market if the country wants us to be," Huang states, addressing the situation. "We probably contributed more to the China market than most countries have. And I'm disappointed with what I see. But they have larger agendas to work out between China and the United States, and I'm understanding of that."

Background and Recent Developments

The U.S. and China have been in a long-standing trade dispute, with the U.S. imposing restrictions on exports of Nvidia's AI chips to China over national security concerns. In August, the White House announced a deal under which Nvidia would receive export licenses for its H20 AI chips in exchange for 15% of its China sales going to the U.S. government. However, the latest move by China represents another setback for Nvidia's business in the region.

"The Chinese market is important. It's large. The technology industry is vibrant. We've been in service of it for 30 years," Huang emphasizes. He adds that Nvidia will continue to support both the Chinese and U.S. governments as they navigate these geopolitical policies.

Impact on Nvidia's Business

Huang describes the past few years as a "roller coaster" for Nvidia's business in China. The company has advised financial analysts not to include China in their forecasts due to the ongoing discussions between the U.S. and Chinese governments. This uncertainty has led to significant challenges for Nvidia, which has seen its business in China fluctuate due to the changing regulatory environment.

Adding to the complexity, China's State Administration for Market Regulation recently opened an anti-monopoly investigation into Nvidia over its acquisition of Mellanox, an Israeli technology company specializing in network solutions for data centers and servers. This further complicates Nvidia's operations in the region and highlights the broader tensions between the two nations.

Global AI Investments and Future Outlook

Despite the challenges, Nvidia continues to invest heavily in AI infrastructure globally. On Tuesday, the company announced a £11 billion ($15 billion) investment in the U.K.'s AI infrastructure, joining other U.S. tech giants like Microsoft, Google, and Salesforce in making significant investments in the country.

"Regardless of the current geopolitical situation, we will continue to be supportive of the Chinese government and Chinese companies as they wish, and we're of course going to continue to support the U.S. government as they all sort through these geopolitical policies," Huang affirms.

The future of Nvidia's business in China remains uncertain, but the company is committed to navigating the complex geopolitical landscape and continuing to innovate in the AI sector.

References

1. Nvidia CEO says he's 'disappointed' after report China has banned its AI chips