Chipmaker Nvidia CEO Jensen Huang warned that Chinese AI companies are rapidly advancing due to US export restrictions. He noted that Huawei has become a strong competitor amid these curbs.
“The Chinese competitors have evolved,” Huang said on Wednesday in an interview with Bloomberg Television. Chinese company Huawei Technologies Co blacklisted by the US government, has become “quite formidable,” he said.
The export restrictions imposed by the United States on China have effectively barred Nvidia from accessing its largest chip market. Due to this, the company expects to lose $8 billion in sales this quarter. Huan urged that the Donald Trump-led US government should ease restrictions during a quarterly earnings call Wednesday.
US export restrictions
The Biden administration introduced the AI diffusion rule in January to regulate the global distribution of advanced AI technologies. The AI diffusion rule was opposed by Huang earlier. In May, the Trump administration announced it was rescinding this rule, reportedly giving little relief to AI companies.
Gap between US and Chinese products is declining
Instead of keeping AI technology away from Chinese companies, local firms are simply discovering alternatives, Huang said. Nvidia’s major buyers, such as Tencent Holdings Ltd. and others, can’t be blamed for shifting to Huawei because they can no longer depend on US suppliers, he added.
“Like everybody else, they are doubling, quadrupling capabilities every year. And the volume is increasing substantially,” Huang said.
He further warned that the gap between US products and Chinese alternatives is declining. The performance of Huawei’s latest AI chip is similar to Nvidia’s own H200, a state-of-the-art component till its replacement was found in recent months.
Export curbs on H20 chips
As per the latest rules, Nvidia is not able to export even its H20 chip, a downgraded version of H200, to China.
In April, the Trump administration sent a letter to Nvidia stating that it required an export license for the company’s H20 chip, according to various reports.
He stated that degrading the product’s capabilities is not possible. Huang said Nvidia may manufacture alternatives to the H20. However, no current chip is planned. When it plans to do so, the company will have to seek permission from Washington.
“You cannot underestimate the importance of the China market,” Huang said. “This is the home of the world’s largest population of AI researchers,” he added.
Huang pushed for all the world’s AI researchers and developers to use American technology. “Irrespective of the near-term revenue success we have had, we can’t ignore the fact that the Chinese market is very important,” he said.
(With inputs from Bloomberg)