Nvidia is ‘100% out of China’ — Jensen Huang warns what harms Beijing can often harm US ‘even in worse ways’

Nvidia CEO Jensen Huang has voiced concerns over the current US policy restricting China's access to critical technologies used in artificial intelligence (AI), warning that such measures could harm the US economy and its technological leadership.

In an interview with Citadel Securities on Tuesday, Jensen Huang called for a more “nuanced” approach to regulation, suggesting that policies intended to harm China could also backfire on the US, sometimes “even in worse ways”.

“Before we leap towards policies that are hurtful to other people, take a step back and maybe reflect on what are the policies that are helpful to America,” Huang said.

Impact of export restrictions on Nvidia's market share

Huang highlighted the severe commercial impact of the current trade restrictions on Nvidia, whose processors are central to the global AI race and have become a key political bargaining chip in the US-China trade war.

He revealed that Nvidia's market share in China has plummeted from an estimated 95% to 0%. “I can’t imagine any policymaker thinking that that’s a good idea, that whatever policy we implemented caused America to lose one of the largest markets in the world.”

He said that striking a balance between the chief executive's goal of maintaining US tech supremacy, along with retaining access to China, requires a nuanced approach, not an all-or-nothing approach. For now, Nvidia is “100% out of China," and its financial projections are based on assumptions that China will remain out of the picture.

“If anything happens in China, which I hope it will, it’ll be a bonus,” Huang told Citadel.

Why access to China matters

Despite the current political climate, Jensen Huang stressed the importance of maintaining a connection to the Chinese ecosystem. He said that even though he would like the world to run on US “know-how,” about half the world’s AI researchers are located in China.

“I think it’s a mistake to not have those researchers build AI on American technology,” he added.

Tensions between the two nations

The Biden administration began restricting exports of Nvidia’s most advanced AI chips to China in 2022, prompting the company to design a processor that complied with the new limits, Fortune reported.

However, the regulatory environment remained volatile. In April, Nvidia said the Trump administration had blocked the sale of some of its AI chips to China without licenses and would require them for future sales, followed by the granting of export licenses in August for certain Nvidia and AMD chips to China in exchange for 15% of the revenues.

However, Chinese regulators reportedly told domestic tech companies not to purchase Nvidia chips that were designed to meet US export requirements.

In a retaliatory move to US export rules on AI chips, Beijing imposed strict limits on exports of rare earths, a critical material essential for manufacturing a wide range of advanced technologies.

This prompted US President Donald Trump to announce an additional 100% tariff on Chinese goods. Officials from both nations are expected to resume trade talks this week, ahead of a planned meeting with Trump and his Chinese counterpart Xi Jinping later this month.

“It’s a large market. China is the second-largest computer market in the world. It is a vibrant ecosystem. I think it’s a mistake for the United States to not participate. So hopefully we’ll continue to explain and inform and hold out hope for a change in policy,” he told Citadel.