In a recent op-ed, Jensen Huang, the CEO of Nvidia, decried U.S. export policies that prevent such advanced computing chips from being exported to China. He criticized these restrictions as a “flop.” During a press conference at the annual Computex conference in Taipei, Taiwan, he argued that these restrictions not only hinder American companies but inadvertently bolster Chinese technological advancements.
It wasn’t until the Trump administration that the U.S. began seriously stepping up restrictions on semiconductor exports. The government justified these actions largely on national security rationale that Chinese companies with military connections would gain access to sensitive technology. The Biden administration subsequently deepened these restrictions, particularly targeting companies such as Huawei. They cautioned U.S. companies that importing chips manufactured by Huawei could lead to unwitting violations of the law.
Huang’s comments come amidst a broader review from the U.S. government as to how the U.S. will implement export controls going forward. Most notably this past Friday, the Commerce Department announced new licensing requirements for certain high-end Nvidia chips. This narrow decision draws into sharper relief the current volatility and tensions in technology trade. In a major policy change, the U.S. lifted most of the far-reaching limitations instituted during the Biden administration. Simultaneously, it moved to restrict sales overall to dozens of other countries.
Huang argued that the underlying assumptions of the AI diffusion rule were deeply misguided to begin with. As he ended his testimony, he doubled down on his assertion that the existing regulations are wrong-headed. He noted that these policies have pushed Chinese firms to greatly invest in indigenously developed counterparts for cutting-edge technologies.
The measures have received a vigorous, high-profile campaign of opposition from the tech industry. Restricting technology transfers, besides being a party-pooper, will allow rivals abroad to seize the moment, Nvidia and other firms claim. Huang focused on a new, and on the surface, counterintuitive trend of rising Chinese investment in Chinese domestic chip production. That investment has allowed China to rapidly catch up with U.S. technology.
Beijing has reacted strongly to the U.S.’s export restrictions, asserting that they undermine agreements reached during recent trade negotiations in Switzerland. From the Chinese government’s perspective, these recent moves are severely damaging global trade ties and economic collaboration.