Huang Labels US AI Chip Controls on China a Failure

Nvidia CEO Jensen Huang said that attempts by the US to restrict the export of AI chips to China were a failure. He commented that sales to China mainland plummeted while the country’s AI capabilities soared.

Speaking at Computex in Taipei, Huang noted that the fundamental assumptions that led to the AI diffusion rule in the beginning have been proven to be fundamentally flawed. He was referring to controls issued under the Joe Biden administration, which imposed tough licensing requirements on exports of advanced AI chips to non-US allies.

The measure was canceled last week by the US Commerce Department, which is in the process of rolling out additional steps to strengthen export controls on chips worldwide. Huang urged the US government to reduce curbs on the export of AI technology to China, as current restrictions block US companies from a growing market. Earlier this month, he estimated it could reach $50 billion in the next two to three years.

While a series of US restrictions have severely limited Chinese companies from importing the most advanced ICs and manufacturing systems, domestic companies have invested heavily to develop replacements or find workarounds, highlighted by Huawei’s Ascend processors and DeepSeek’s AI model. Huang added its market share in China dropped from 95% in early 2021, when Joe Biden became US president, to 50% today.

China accounted for 22% of Nvidia’s total revenue in 2022, before the first wave of US export restrictions. The figure declined to 13% in fiscal 2025, which ended on 26 January 2025. Nvidia issued a statement when the AI diffusion measure was introduced, arguing that a last-minute rule restricting exports to most of the world would be a major shift in policy, which would threaten economic growth and US leadership. In early May, the company reportedly started work to reconfigure an AI chip specifically for China to avoid new US controls.