TAIPEI, TAIWAN – Nvidia CEO Jensen Huang issued a striking critique this Wednesday, declaring U.S. export controls on AI chips to China a “failed strategy” that has backfired on American companies while accelerating China’s pursuit of semiconductor self-reliance.
U.S. Chip Curbs Ignite China’s Domestic Innovation
Speaking at a press conference during COMPUTEX 2025 in Taipei, Huang argued that the Biden administration’s Intelligence Diffusion Rule—released in January and initially set to take effect in May—fundamentally misjudged geopolitical realities. The policy sought to tier global markets for AI chip exports, effectively barring cutting-edge semiconductor sales to China. However, the Trump administration revoked the rule on May 13.
“The foundational premise of these export controls was flawed from the start,” Huang stated. “By restricting advanced AI chip sales, we’ve unintentionally catalyzed China’s domestic R&D efforts, creating a self-sufficient supply chain that operates independently of foreign manufacturers.”
Market Shifts and Revenue Losses
Nvidia’s CEO revealed a stark shift in market dynamics: The company’s share in China’s AI chip sector plummeted from 95% during the Biden era to 50% today. He attributed this to Beijing’s aggressive pivot toward homegrown alternatives, driven by U.S. restrictions. “Over half of the world’s AI researchers are now based in China,” Huang noted. “Our competitors there are leveraging these policies to push us out.”
The financial toll has been significant. In April, Nvidia disclosed a $5.5 billion charge related to blocked H20 AI chip exports under Trump’s revised policy. Huang now estimates losses tied to the H20 restrictions could reach $15 billion—a critical hit given his projection of China’s $50 billion AI market opportunity by 2026.
Global Supply Chain Tensions Intensify
The Biden administration’s broader 2022 ban on exporting advanced chipmaking equipment to China has fueled international backlash. Recent U.S. efforts to restrict Chinese-made computing chips globally, including Huawei’s Ascend processors, drew sharp criticism from Beijing. A Chinese Commerce Ministry spokesperson condemned the measures as “unilateral bullying” threatening global semiconductor supply chains and “stifling fair technological competition.”
Huang emphasized that Washington’s approach risks isolating U.S. firms: “The Trump administration recognized that America isn’t the sole provider of AI technology. Markets adapt, competitors emerge, and policies that harm corporate innovation ultimately weaken national interests.”
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