Jensen Huang, President and CEO of NVIDIA, outright refuted concerns regarding the potential use of U.S.-made artificial intelligence (AI) chips by the Chinese military, saying there is "no need to worry" ahead of his visit to China. He made it clear that he will not give up on the world's largest semiconductor market, China.
In an interview with CNN on the 13th (local time), Huang said, "The Chinese military will not attempt to use America's cutting-edge AI semiconductors for military purposes due to the risk that the supply chain can be cut off at any time," adding, "The Chinese military cannot rely on U.S. technology." This implies that China is also aware that dependence on specific technologies could become a strategic weakness and will avoid using American technology.
Huang's remarks contradict the fundamental premise of the U.S. semiconductor export control policy toward China. The U.S. government has expressed concerns that high-performance computing products, including NVIDIA's AI chips, could be used to enhance China's military capabilities, posing a threat to U.S. national security. However, Huang argued that by trying to prevent this, the U.S. government is inadvertently escalating an uncontrollable threat known as 'the establishment of China's own AI technology ecosystem.' He has continuously warned that America's stringent controls could accelerate China's technological self-sufficiency, ultimately fostering a stronger competitor in the long term.
His emphasis on the counterproductive effects of sanctions stems from NVIDIA being directly impacted by the semiconductor export regulations against China. Up until last fiscal year, NVIDIA made $17 billion (approximately 23 trillion won), which accounted for 13% of its total revenue, in the Chinese market. However, as the Trump administration tightened regulations against China, it limited NVIDIA's remaining exports of AI chips (H20) intended for China. During the earnings conference call in May, Huang noted that the company is at risk of losing the $50 billion (approximately 70 trillion won) Chinese AI market due to the export regulations.
In fact, NVIDIA processed $4.5 billion (approximately 6 trillion won) as expenses related to the disposal of H20 chip inventory in the second quarter (April to June) and incurred a revenue loss of $2.5 billion (approximately 3 trillion won). NVIDIA anticipates that the losses due to sales restrictions in the third quarter (July to September) will significantly increase to over 10 trillion won and reported that it is seeking to develop other products to compete in the Chinese market.
Huang is said to have reiterated this position in a meeting with U.S. President Donald Trump last week. His consistent argument is that for U.S. corporations to maintain an edge in the global AI market, they must continue to supply products to China.
While persuading his own government in this manner, Huang is also taking steps to visit China directly to seek a business breakthrough. He plans to attend the "China International Supply Chain Promotion Expo" in Beijing from the 16th to the 20th and hold a press conference there. Amid news of his planned trip coinciding with NVIDIA's upcoming launch of a dedicated AI chip for the Chinese market in September, U.S. Congress immediately issued a warning. U.S. senators sent a letter to Huang, urging him not to engage with Chinese companies or entities on the sanctions list that could weaken export controls.