CEO promises billions to dodge China-U.S. trade war

[Samyarup Chowdhury]

Nvidia’s CEO has become a central figure in the U.S.-China technology dispute. BY: Unsplash

Jensen Huang, CEO of California-based chip designer Nvidia, has become a central figure in the U.S.-China technology dispute, persuading both Washington and Beijing to ease restrictions on artificial intelligence chips. Knewz.com has learned that his behind-the-scenes meetings with President Donald Trump and Chinese regulators culminated in an unexpected outcome: the approval for Nvidia to sell its H20 AI chip in China.

Nvidia CEO makes his case to Washington​

Huang met several times with Trump to warn that cutting China off from advanced U.S. chips could backfire. BY: MEGA

Huang met several times with Trump to warn that cutting China off from advanced U.S. chips could backfire. He argued that Beijing would accelerate its domestic development if locked out entirely. According to Trump, Huang pledged that Nvidia and its partners would invest up to $500 billion in American factories and research. In return, the administration allowed the H20, a chip specifically designed to comply with earlier restrictions, to be shipped to China. The approval came after a White House meeting in which Trump pressed Nvidia to give the government 20% of its China sales in exchange for issuing the export licenses. “If I’m going to do that, I want you to pay us something,” Trump said. Huang countered with 15% and illustrated his case with a diagram showing how tariffs would be counterproductive for his goal of increasing U.S. chip production. Shortly after, Trump announced tariff exemptions for tech firms investing domestically.

China approves U.S. chip-software deal​

China reciprocated by approving a $35 billion deal involving U.S. chip-software firms that it had blocked for about a year. BY: Unsplash

China reciprocated by approving a $35 billion deal involving U.S. chip-software firms that it had blocked for about a year. Chinese regulators also froze an inquiry into an earlier Nvidia acquisition. It has been reported that Huang has made repeated visits to Beijing this year, even as other American executives avoided public ties to Chinese companies. He has met with leaders of Alibaba, Xiaomi, and AI startup MiniMax to reassure them of Nvidia’s commitment to the Chinese market. Engineers in China have dubbed him the “Magic Tailor” for designing chips like the H20 to fit within U.S. regulations. “I hope to get more advanced chips into China than H20,” the Nvidia CEO said during a recent Beijing trip. “Whatever we’re allowed to sell in China will continue to get better and better.”

Backlash from Congress, rival executives​

Rival executives, including Elon Musk, argued against the move. By: ZUMAPRESS.com / MEGA

However, the decision has triggered criticism in Congress, where lawmakers from both parties view advanced chips as a national security risk. Senator Mark Warner and other members of the Intelligence Committee warned Commerce Secretary Howard Lutnick that China’s commercial AI advances, helped by Nvidia, are “quickly translating into a national security advantage for the People’s Liberation Army.” Rival executives, including Elon Musk, also argued against the move. Musk cautioned that supplying China with more powerful chips undermined U.S. dominance in AI. However, Huang countered that the H20 is only capable of “inference” work, not large-scale model training. “They simply can’t rely on it,” he said in a televised interview.

What is at stake for Nvidia​

Nvidia’s market share in China has fallen sharply under U.S. restrictions. BY: Unsplash

According to reports, Nvidia’s market share in China has fallen sharply under U.S. restrictions, from 95% to about 50%. At stake is tens of billions in sales, as well as the company’s position in a market that fuels much of global demand for AI. Trump’s decision to permit H20 sales is a departure from the national security-first approach taken in his first term and under President Joe Biden, when the prevailing trend was generally tougher control on tech sales to China. Administration officials have portrayed the move as part of a broader effort to balance national security with economic growth. “President Trump regularly talks to business leaders like Jensen Huang who are making historic investments in American manufacturing,” White House spokesperson Kush Desai said. “The only special interest guiding the president’s decision-making is the best interest of the American people.”

The post CEO promises billions to dodge China-U.S. trade war appeared first on Knewz.

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