Nvidia CEO Jensen Huang has recently cautioned that the United States’ restrictions on the rules of exporting advanced AI chips to China could now significantly harm American technology companies.
Speaking on the imposition of the latest U.S. export bans, Huang has also warned that cutting off access to one of the world’s largest markets when it’s for AI computing could backfire, thus resulting in weakening U.S. firms’ global competitiveness and even driving innovation elsewhere.
The Biden administration has also recently tightened regulations to prevent the country of China from obtaining any kind of high-end AI processors and even citing national security concerns.
The move is basically to target chips which are used in training the large-scale artificial intelligence models, which is an area where Nvidia’s GPUs dominate the global market.
However, Huang hasalso argued that these restrictions could be something that would result in unintended economic consequences by encouraging various Chinese companies to accelerate their process of domestic chip development, reducing their dependence on American technology.
China also currently accounts for a substantial portion of Nvidia’s revenue, which is particularly in the data centre and AI sectors.
The new restrictions to be imposed are expected to limit Nvidia’s ability to sell some of its most powerful AI chips, such as the ones like A100 and H100 models, to the various Chinese clients.
In response, Nvidia has been developing various compliant alternatives, but these would not be the ones to fully replace the performance of restricted chips, potentially reducing profit margins.
Huang has also emphasised that global collaboration is essential for technological progress, warning that overregulation may lead to the fragmentation of the AI ecosystem.
Industry analysts have also echoed their concerns, noting that the chip export ban could also be the one to disrupt global supply chains and lead to parallel markets in AI hardware.
