Nvidia’s Jensen Huang thinks U.S. chip curbs failed — and he’s not alone
Jensen Huang, co-founder and CEO of Nvidia Corp., speaks during a news conference in Taipei on May 21, 2025.
I-hwa Cheng | Afp | Getty Images
Replacing Nvidia is a tall order. While Chinese competitors are years behind the company’s cutting-edge technology, many analysts and insiders warn they are catching up, thanks to U.S. export restrictions.
U.S. chip restrictions on the sale of advanced semiconductor technology, especially those used in artificial intelligence, have been rolled out over several years, with the initial aim of curbing China’s military advancement and protecting US dominance in the AI industry.
However, according to Nvidia CEO Jensen Huang, U.S. semiconductor export controls on China have been “a failure,” causing more harm to American businesses than to China.
While the goals of cutting back the Chinese military’s access to advanced U.S. technology and maintaining U.S. leadership in AI appear to have had some success on paper, loopholes and existing semiconductor stockpiles in China have complicated these aims, said Ray Wang, an independent tech and chip analyst with a focus on U.S.-China competition.
“That’s partly why we are seeing a closing of the gap between Chinese and U.S. AI capabilities,” added Wang.
A self-inflicted wound?
Leaders of Nvidia and other American chip designers have long lobbied against chip controls as they worry about losing lucrative business deals. Huang said at the annual Computex technology trade show in Taipei that Nvidia’s GPU market share in China fell to 50% from 95% over the past four years.
Indeed, chip experts say that the curbs create more harm than good for the U.S.
“The effects of the controls are twofold. They have the impact of reducing the ability of U.S. companies to access the China market and, in turn, have accelerated the efforts of the domestic industry to pursue greater innovation,” said Paul Triolo, Partner and Senior VP for China at DGA Group.
“You create competitors to your leading companies at the same time you’re cutting them off from a massive market in China,” he added.
While Washington’s most comprehensive export controls were passed during former U.S. President Joe Biden’s term in the White House, curbs on Huawei and SMIC, China’s largest chipmaker, go back to Donald Trump’s first term in office.
On April 15, Nvidia disclosed that new controls, which restricted sales of its H20 graphics processing units to China, had led to a $5.5 billion charge against its revenue.
Counter-intuitive curbs
The restrictions are expected to be a boon for the demand and development of local Nvidia alternatives like Huawei, which is working on its own AI chips. They also come against the background of Beijing mobilizing billions as part of its chip self-sufficiency campaign.
“The bottom line is, the controls have incentivized China to become self-sufficient across these supply chains in a way they never would have contemplated before,” Triolo said.
Chinese AI-related achievements, such as DeepSeek’s R1 model and news of Huawei chip progress, have led observers to question the effectiveness of chip controls.
According Wang, the independent analyst, China’s semiconductor and AI space has seen an acceleration of startups, market opportunities, and AI talent alongside the restrictions, which has clearly resulted in domestic innovations.
“I think the arguments that export controls accelerate innovation is quite valid,” Wang said.
Nivida’s Haung also noted these trends in April, telling lawmakers in Washington that the country has made enormous progress in the last several years and is right behind the U.S.
Moving goal posts?
Nvidia’s H20 chip was designed specifically to comply with existing chip controls prior to the clampdown on exports.
“We are not just talking about one export control, we are talking about a series of export controls that originate from all the way back in 2019,” said Wang, noting that the evolving policies have had a couple of different objectives.
Meanwhile, in what DGA’s Paul Trilio calls a “moving of the goalposts,” it seems that the aims of the restrictions have shifted to an intention to slow down and contain Chinese AI and semiconductor developments.
“The continued expansion of the controls, and the lack of an articulation of what the clear end game here is, has really created a lot of issues, and created a lot of collateral damage,” Trilio said, adding that it has led more people to question the policy.
In a statement earlier this month, the Information Technology & Innovation Foundation, a U.S. think tank which has received funding from various technology companies, said in a post that “the Biden administration’s export control policy for AI chips has largely been a failure since day one. Yet, year after year, it has doubled down, attempting to plug various loopholes.”
“While [the U.S. government] is certainly right to prevent U.S. companies from selling advanced AI technology to the Chinese military, cutting U.S. companies off from the entire commercial Chinese market is a cure worse than the disease,” Stephen Ezell of ITIF told CNBC in an email.
“U.S. export controls have cost NVIDIA at least $15 billion in sales, and those are revenues the company needs to be able to earn to invest in future generations of innovation.”
Attendees walk through an exposition hall at AWS re:Invent, a conference hosted by Amazon Web Services, in Las Vegas on Dec. 3, 2024.
Noah Berger | Getty Images
Amazon Web Services has agreed to provide U.S. federal agencies with up to $1 billion in discounts for cloud adoption, modernization and training through 2028, an agency overseeing government procurement announced Thursday.
The agreement is expected to speed up migration to the cloud, as well as adoption of artificial intelligence tools, the General Services Administration said.
“AWS’s partnership with GSA demonstrates a shared public-private commitment to enhancing America’s AI leadership,” the agency said in a release.
Amazon‘s cloud boss Matt Garman hailed the agreement as a “significant milestone in the large-scale digital transformation of government services.”
The discounts aggregated across federal agencies include credits to use AWS’ cloud infrastructure, modernization programs and training services, as well as incentives for “direct partnership.”
The GSA announced a similar deal last month with cloud rival Oracle. The agency also reached an agreement with OpenAI on Wednesday that will give federal agencies access to ChatGPT for $1 through the next year.
A Duolingo logo is seen on a smartphone.
Pavlo Gonchar | LightRocket | Getty Images
Duolingo shares skyrocketed more than 30% after the language learning platform boosted its guidance due to strong user growth driven by artificial intelligence.
The mobile learning platform hiked its full-year guidance to between $1.01 billion and $1.02 billion, up from a prior range of $987 million to $996 million. Duolingo also lifted its bookings guidance to between $1.15 billion and $1.16 billion.
“We exceeded our own high expectations for bookings and revenue this quarter, and did it while expanding profitability,” said co-founder and CEO Luis von Ahn in a release.
Daily active users jumped 40% to nearly 48 million from about 34 million in the year-ago period.
In an effort to expand its course offerings and boost users, Duolingo has implemented AI tools, including a video-call conversation practice feature for some paying subscribers. The company has also expanded beyond language learning with new course such as chess.
Duolingo also announced the acquisition of London-based music gaming startup NextBeat for an undisclosed amount as it looks to broaden its app products.
The company’s CEO said Duolingo is still in the early stages of its growth trajectory.
Revenues jumped about 41% year over year to $252 million and beat a Wall Street estimate of $241 million. Net income grew 84% from a year ago to about $45 million, or 91 cents per share.
For the third quarter, Duolingo projects revenues between $257 million and $261 million, surpassing the $253 million forecast from Wall Street analysts.
WATCH: AI enhances conversational language learning, says Duolingo CEO Luis von Ahn
Technology
Democrats question Google’s Trump talks over censorship suit and possible ‘quid-pro-quo’ deal
Ranking Member, U.S. Senator Elizabeth Warren (D-MA) speaks during a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on President Trump’s nominees to lead the National Economic Council, Consumer Financial Protection Bureau and Federal Housing Finance Agency, on Capitol Hill in Washington, D.C., U.S., February 27, 2025.
Annabelle Gordon | Reuters
Senate Democrats, including Elizabeth Warren of Massachusetts, are asking Google and its YouTube unit whether discussions with lawyers for President Donald Trump have included the possibility of settling a censorship suit in exchange for potentially favorable treatment from the administration.
In a letter sent Thursday to Google CEO Sundar Pichai and YouTube CEO Neal Mohan, the senators asked the executives about conversations with President Trump’s lawyers over an ongoing lawsuit that was filed by Trump more than four years ago, accusing the online video platform of unlawful censorship.
The lawsuit stemmed from the suspension of Trump’s accounts on social media sites after the January 6, 2021, attack on the U.S. Capitol. Trump filed suits against Facebook, Twitter, and YouTube later that year.
The senators highlighted reports of a court filing from May indicating that lawyers representing YouTube and President Trump were “engaged in productive discussions.” In that filing, the two parties asked the judge to delay a June court hearing until Sept. 8.
“We are concerned about the possibility that Google could settle the lawsuit against YouTube in a quid-pro-quo arrangement to avoid full accountability for violating federal competition, consumer protection, and labor laws, circumstances that could result in the company running afoul of federal bribery laws,” the letter states.
Twitter (now X) and Facebook (now Meta) settled lawsuits with Trump this year, for about $10 million and $25 million, respectively. Trump’s 2021 suit claimed unconstitutional censorship after his accounts were suspended. A judge dismissed the Twitter case in 2022, but Trump appealed.
Under the 1996 Communications Decency Act, social media platforms are allowed to moderate content on their platforms and exempt themselves from liability for the material that users post.
The senators noted in their letter that Google is a defendant in multiple unfair labor and antitrust lawsuits brought by the U.S. government. It also pointed to the company’s donation of $1 million to President Trump’s inaugural fund, and noted that Pichai attended the president’s inauguration and dined with him at Mar-a-Lago.
Google currently faces the potential of being broken into parts, after the company lost an antitrust case last year brought by the Department of Justice related to Google’s dominance in search.
The company argued that any kind of breakup could result in the U.S. ceding tech competition to China. The judge is expected to rule on the penalties this month.
Google also has several open cases from the National Labor Relations Board, alleging unfair labor practices, the senators said.
“The company has substantial interests in almost every aspect of the federal government, from tax policy to energy and environmental policy, and much more,” they wrote. “Google stands to benefit from how the federal government proceeds in these matters, and Google may settle this lawsuit in the hopes of securing outcomes favorable to the company.”
Despite calls for answers, Democratic senators have limited ability to force action as Republicans control the White House and both houses of Congress.
Google didn’t immediately provide a comment.
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