America’s escalating chip crackdown on China took center stage this week, drawing sharp warnings from Nvidia Corp (NASDAQ:NVDA) chief Jensen Huang and investors who say U.S. policy could redefine the future of the semiconductor industry.
Huang met with President Donald Trump on Wednesday to discuss the high-stakes issue of chip export restrictions, just as Congress debates measures to keep advanced AI technology out of China’s hands.
While Huang told reporters on Capitol Hill that he supports ensuring American companies have “the best and the most and first,” he criticized the proposed “GAIN AI Act,” which would legally mandate that priority.
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Huang argued the bill would actually harm the U.S. and expressed relief at reports that lawmakers dropped it from the annual defense spending package, CNBC reported Wednesday.
The CEO also took aim at the growing patchwork of individual state AI laws.
Huang warned that navigating 50 different regulations would grind the industry to a halt and pose a national security risk, arguing instead for a single federal standard.
Although President Trump recently pushed Congress to override state laws with a federal mandate, House Majority Leader Steve Scalise confirmed on Tuesday that the provision lacks the votes to pass this year.
China has effectively shut Nvidia out of its semiconductor market, ending years of dominance and cutting the company’s AI-chip share “from 95% to 0%,” as CEO Jensen Huang put it.
Beijing has banned foreign AI chips from new state data-center projects, tightened port checks on semiconductor imports, and accelerated its push to triple domestic AI-chip production by 2026.
With stockpiles of Nvidia GPUs and improving local alternatives, Chinese demand has collapsed.
Looking Beyond China
Huang countered that Nvidia no longer needs China, projecting $3 trillion to $4 trillion in global AI-infrastructure spending by the end of the decade, a bet that booming demand outside China can offset a full market loss.
The $4.4 trillion Nvidia stock gained 34% year-to-date, topping the NASDAQ Composite Index’s ~22% returns, becoming the biggest company this year.
Skepticism from Industry Figures
Canadian businessman, investor, and television personality Kevin O’Leary also shared similar skepticism over the sanctions.
He warned that tightening U.S. semiconductor sanctions on China could backfire, arguing that restricting Nvidia and Advanced Micro Devices, Inc. (NASDAQ:AMD) chip exports only accelerates Beijing’s push for self-reliance.
He said the U.S. should instead sell its most advanced AI chips globally to keep foreign developers dependent on American hardware and to maintain long-term technological dominance.
The Impact of U.S. Sanctions
His comments come as Washington intensifies chip curbs and China shuts Nvidia out of its AI-chip market, moving, as Jensen Huang noted, “from 95% market share to 0%.”
Beijing’s bans on foreign AI chips, stricter port checks, and aggressive domestic production have reduced demand for U.S. semiconductors.
Meanwhile, the Trump administration recently blocked Nvidia’s scaled-down B30A chip, and major cloud providers backed the Gain AI Act to tighten export controls, despite warnings that over-restricting sales could strengthen Chinese rivals like Huawei.
NVDA Price Action: Nvidia shares were up 0.57% at $180.61 during premarket trading on Thursday, according to Benzinga Pro data.
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