On Tuesday, Nvidia Corporation (NASDAQ:NVDA) CEO Jensen Huang warned that the push to isolate China from advanced AI chips could go wrong.
Huang Urges Balance Between American Leadership And Global Access
At Nvidia's first developers' conference in Washington, Huang told the Donald Trump administration that the U.S. must lead in AI while keeping China's developer ecosystem within reach, reported Reuters.
"We want America to win this AI race. No doubt about that," Huang stated, adding, "We want the world to be built on American tech stack. Absolutely the case."
However, he said, "We also need to be in China to win their developers. A policy that causes America to lose half of the world’s AI developers is not beneficial long term, it hurts us more."
Nvidia Doubles Down On US Manufacturing And Strategic Partnerships
Huang also announced Nvidia is building seven new supercomputers for the U.S. Department of Energy, which has secured $500 billion in orders for advanced chips.
The largest of the supercomputers will be built with Oracle Corp (NYSE:ORCL) and include 100,000 of Nvidia's new Blackwell chips.
The systems will support nuclear research, energy development and national defense initiatives.
On the same day, Nvidia also unveiled new partnerships with Nokia Corporation (NYSE:NOK) to advance 6G networks, with Uber Technologies (NYSE:UBER) and Stellantis (NYSE:STLA) on autonomous vehicles and with Palantir Technologies (NASDAQ:PLTR) to enhance logistics and AI infrastructure for government and enterprise clients.
Nvidia's China Market Collapses As Tensions Escalate
Huang's comments come as Washington continues to restrict exports of Nvidia's most advanced AI chips to China, citing national security concerns.
Beijing, in turn, has reportedly urged major firms such as ByteDance and Alibaba Group (NYSE:BABA) to stop purchasing Nvidia hardware and turn to domestic suppliers like Huawei Technologies and Cambricon.
Earlier this month, Huang revealed that Nvidia's market share in China had plunged from 95% to zero.
"They’ve made it very clear that they don’t want Nvidia to be there right now," Huang said at a news conference during the company’s GTC developers event on Tuesday. "I hope that will change in the future because I think China is a very important market."
Nvidia has also excluded China-related sales from its financial forecasts.
Nvidia Is Building In America, But Warns Of Long-Term Risks
Huang praised Trump's "America First" agenda for boosting domestic chip production on Tuesday. He noted that Nvidia is manufacturing in Arizona with Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) and assembling systems in Texas and California.
But he contended that Nvidia requires access to roughly $50 billion in potential sales from China to finance its U.S.-based research and development and sustain the company's competitive edge, the report noted.
Price Action: Nvidia shares gained 4.98% on Tuesday and increased another 1.69% in after-hours trading, according to Benzinga Pro.
Benzinga’s Edge Stock Rankings place Nvidia in the 97th percentile for Growth. Click here to see how it stacks up against AMD and other top semiconductor players.
Photo Courtesy: Glen Photo via Shutterstock
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
