US controls turbocharged Huawei to build competitive AI chips: Nvidia

Not only Huawei and China, but even Nvidia is criticizing the newest US export controls on AI chips. The foreign company says that the latest chip guidelines are becoming an opportunity for Chinese firms while a curse for American OEMs.

Jensen Huang, the CEO of Nvidia, attended a media interview on Wednesday at the Computex Technology Show in Taipei. During the talks, Nvidia stated that US controls “turbocharged” Chinese rivals like Huawei to make competitive AI chips.

Huang condemned Washington’s decision to block the flow of H20 AI chips in its second-largest market, as it seems a big problem for the company’s annual revenue.

The CEO explained how the tougher US sanctions are now pulling back the company. There was a time when Nvidia occupied 95% of the Chinese AI market, but now its shares have fallen to 50%, due to tough competition from firms like Huawei.

“Four years ago, Nvidia had 95% of the market share in China. Today it is only 50%. The rest is Chinese technology. They have a lot of local technology they would use if they didn’t have Nvidia.” – said Nvidia CEO Jensen Huang.

Nvidia CEO further mentioned that Chinese AI researchers will use their chips, second-best one. The US export controls are giving Huawei and its firms the spirit and government support to accelerate their AI development.

“Our competition is intense in China,” said Jensen Huang.

US controls turbocharged Huawei to build competitive AI chips: Nvidia (Image Credits: Nvidia)

The Trump administration restricted Nvidia from selling its H20 chips in China. It asked for a license, in this case worth $5.5 billion. As a result, the US chipmaker stopped supplying its chips to customers like Alibaba and Tencent.

Although this regulation turned the Chinese customers to Huawei for its Ascend series chips. The company also started working on new-gen AI processors like Ascend 910D to fill the gap of Nvidia H20 chipsets in its home ground.

Following these shifts, Nvidia’s Jensen Huang said:

“The fundamental assumptions that led to the AI diffusion rule in the beginning have proven to be fundamentally flawed. If the US wants to stay ahead, we need to maximize and accelerate our diffusion, not limit it.”

According to Nvidia, the US is now planning to reverse its policy and build large AI data centers outside America, powered by Nvidia chips. It is drafting such rules that will let the US tech flourish without enabling rivalries to access it.

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