In a pointed critique of US export policies, Nvidia CEO Jensen Huang has expressed significant dissatisfaction with the restrictions placed on exports to China, labeling them as a costly failure. Speaking at the Global Media Q&A in Taipei, Huang emphasized that these controls have resulted in substantial financial losses for Nvidia, amounting to billions of dollars in inventory write-offs. The inability to ship Nvidia's H20 products to China due to these restrictions has notably impacted the company's financial performance.
Huang highlighted that last year, Nvidia derived approximately $17 billion in revenue from China, which constituted 14% of the company's total revenue. The H20 chip was previously the only AI product that Nvidia could legally sell in China, but recent US policy changes have further restricted these exports. As a result, Nvidia's market share in China has plummeted from 95% to 50%, leading to a decline in average selling prices and profits.
Rejecting the possibility of releasing a lower version of the H20 chip in China, Huang argued that further reducing the chip's performance would render it ineffective in the market. His candid remarks underscore the significant losses Nvidia faces due to the export restrictions and highlight the potential missed opportunities in the rapidly expanding Chinese market.
Huang stressed the importance of the Chinese market, noting its status as the world's second-largest computing market and a potential $50 billion AI market opportunity next year. He suggested that easing regulations could benefit the US by increasing tax revenue, creating jobs, and maintaining industrial competitiveness. Furthermore, he warned that restrictive policies could drive technological advancements in China, potentially allowing competitors to catch up.
Highlighting the rapid innovation by Chinese tech giant Huawei, Huang urged the US government to reconsider its policy direction. He called for a change that would allow Nvidia to compete in China, emphasizing that 50% of AI researchers are based there, making it crucial for US technology to be part of their development processes.
In closing, Huang expressed a desire for the US government to allow US technology companies to engage with the Chinese market, acknowledging the limited options available and the challenges of the current situation. He committed to continuing efforts to address these challenges, advocating for policy changes that would enable Nvidia to reclaim its competitive position in China.
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