Nvidia publicly went after Anthropic on Thursday, calling out the startup for pushing U.S. chip export rules that could hit Nvidia’s business overseas. The fight exploded just two weeks before the AI Diffusion Rule kicks in on May 15.
That rule, built under Joe Biden and now under review by President Donald Trump, targets the export of advanced AI chips and model weights. The goal is to stop countries like China from gaining ground in the AI arms race.
The rule puts controls on how American chipmakers can sell high-end hardware abroad, especially to countries flagged as security risks.
The clash started after Anthropic, which is bankrolled by Amazon and depends heavily on Nvidia’s chips, posted a blog on Wednesday saying Chinese groups were sneaking advanced chips through customs using fake baby bellies and hiding them in crates with live lobsters.
“Maintaining America’s compute advantage through export controls is essential for national security and economic prosperity,” the company said in the post. Anthropic also called for the U.S. to lower the export bar for Tier 2 countries, increase enforcement budgets, and cut smuggling paths.
Nvidia fires back at Anthropic over China claims
A Nvidia spokesperson reportedly fired off a response Thursday, saying American companies should stop spinning fake stories and focus on tech.
“American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in ‘baby bumps’ or ‘alongside live lobsters,’” the spokesperson said.
The company also pushed back on using regulations to choke off competition, especially with China’s massive AI talent pool.
“China, with half of the world’s AI researchers, has highly capable AI experts at every layer of the AI stack. America cannot manipulate regulators to capture victory in AI,” the spokesperson said.
Even with the policy war heating up, Nvidia is still working in China. Jensen Huang, the company’s CEO, traveled to China in April to meet with trade officials.
Speaking in Washington, D.C., on Wednesday, Jensen said, “They’re incredible in computing and network technology, all these essential capabilities to advance AI. They have made enormous progress in the last several years.”
Jensen made it clear that China isn’t behind in this race. At the same time, Trump’s administration is reviewing the AI export rules, which could shift how they’re enforced or expanded.
While Nvidia is fighting back against restrictions that might cut into its overseas chip sales, Anthropic is actively asking the U.S. government to tighten those same rules. This is despite the fact that their AI models run on Nvidia GPUs.
AI spending rises despite tariffs and restrictions
As the battle between Nvidia and Anthropic unfolds, the rest of the AI industry is spending like nothing’s wrong. On Wednesday, Microsoft said it spent $16.75 billion in capital expenses last quarter—up nearly 53%.
CEO Satya Nadella said earlier that the company plans to hit $80 billion in capex for 2025. Meta raised its own spending targets, citing increased hardware costs from global suppliers.
Despite growing tariffs and policy risks, investors don’t seem worried. Christopher Danely, an analyst at Citi, told clients Thursday that “AI infrastructure buildouts remain as key priorities for hyperscalers with the companies’ willingness to absorb the costs of tariffs.” He said fears of lower AI spending were overblown and that the sector was still seeing strong investment.
The buildout boom is also lifting AI chip stocks. Broadcom, which helps develop Google’s custom AI chips, reported $4.1 billion in AI revenue last quarter—77% higher than the year before. While Broadcom’s stock had dropped 15% this year, it bounced back over 16% in the past month after beating Q1 expectations.
JPMorgan’s Samik Chatterjee and Barclays analyst Tim Long also weighed in. Samik told clients on Wednesday that “robust investment momentum is still alive” and added Arista Networks, Amphenol, and Coherent to his watch list. Samik expects Arista’s revenue growth to climb again in 2026 and 2027, thanks to more Ethernet being used in AI data centers.
Tim pointed out that Arista got about 35% of its 2024 revenue from Meta and Microsoft. He said Microsoft alone accounts for more than 60% of Arista’s business. If AI spending keeps growing, Tim believes that “higher AI spending could drive more switching business for them.”
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