Jensen Huang, the head of Nvidia, said the United States’ export restrictions on AI chips have failed. Speaking on stage at the Computex tech conference in Taipei, Huang made it clear the controls have done more damage to US businesses than to China.
According to CNBC, he pointed out that Nvidia’s GPU market share in China has collapsed from 95% to 50% in just four years. The company was boxed out while Chinese companies grew faster. Huang called the entire export control strategy “a failure.”
The chip bans were supposed to block China’s military from getting access to advanced semiconductors. US officials started rolling them out during Donald Trump’s first term and made them stricter under Joe Biden.
Now, with Trump back in the White House, the policy still hasn’t been reversed. Instead, the restrictions have pushed Chinese companies to double down on their own hardware. Huawei is developing AI chips to replace Nvidia’s. Beijing has pumped billions into its self-sufficiency drive. Nvidia, meanwhile, lost billions and got sidelined.
China speeds up while Nvidia gets boxed out
Ray Wang, a chip analyst focused on US-China relations, said China isn’t stuck anymore. The original plan to freeze China out fell apart due to loopholes and local stockpiles. “That’s partly why we are seeing a closing of the gap between Chinese and US AI capabilities,” Wang said. Instead of slowing things down, the controls kicked China’s innovation into overdrive.
DeepSeek, a Chinese lab, is already developing its own large AI models. Companies like Huawei are scaling up fast. In April, Huang told lawmakers in Washington that China is now right behind the US in AI. It wasn’t supposed to be like this, but the export bans gave China the push it needed to build its own ecosystem.
The losses for Nvidia are real. The company reported a $5.5 billion hit in April from new rules that blocked sales of its H20 GPUs to China. That’s just one product.
The Information Technology and Innovation Foundation (ITIF), a think tank supported by US tech companies, estimates that Nvidia has lost $15 billion in sales because of these controls. “Those are revenues the company needs to be able to earn to invest in future generations of innovation,” said Stephen Ezell, ITIF’s VP.
Rules changed, targets unclear, damage widespread
The H20 chip was designed to follow the rules, but those rules moved. The US keeps adding new layers to the restrictions, and it’s unclear what the final goal is anymore. Wang said, “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.”
Paul Triolo, partner and China lead at DGA Group, said it’s become a game of changing objectives. “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,” he said.
While the official goal is to block military use, the controls go beyond that. US companies can’t even sell to the commercial market in China now. Ezell said, “Cutting US companies off from the entire commercial Chinese market is a cure worse than the disease.” The bans didn’t just slow US companies down—they gave Chinese competitors a reason to build their own systems faster.
China now has a reason to go all in on AI. Triolo said the restrictions “incentivized China to become self-sufficient across these supply chains in a way they never would have contemplated before.” Before the bans, China was buying chips. Now, they’re racing to build better ones. Washington helped create the very thing it tried to prevent.
