Nvidia’s chief executive has issued a stark warning that fragmented U.S. regulations and export controls are risking American leadership in artificial intelligence, potentially ceding the advantage to a state-subsidized China.
Jensen Huang, CEO of the advanced chipmaker, asserted that China “will win the AI race” propelled by lower operating costs and significant energy subsidies.
This contrasts sharply with the United States, which has limited the sale of Nvidia’s most advanced chips to the Chinese market.
Huang specifically criticized U.S. policy, stating the nation is “slowing down due to fractured rules.” He warned of a potential for “50 new distinct laws” arising from varying state-level regulations.
The White House has maintained these export restrictions despite lobbying from the technology sector to ease the measures.
Former President Donald Trump previously emphasized Washington’s stance, declaring that “the most advanced will be had by no one else but the United States.” He indicated China could work with Nvidia, but not on high-end Blackwell-level systems.
China’s approach, Huang noted, allows its companies to operate large-scale AI infrastructure at a reduced cost. He highlighted incentives where “energy is free” for major tech firms like ByteDance, Alibaba, and Tencent, primarily for their data centers.
These subsidies intensified after Chinese companies found domestic chips, such as those from Huawei and Cambricon, consumed more electricity and increased operational expenses. The state support helps offset the less efficient hardware.
Huang has consistently urged Washington to permit chip sales to China. He argues this maintains global interdependence and preserves the relevance of American technology platforms.
While Trump had suggested a possible deal for a “negatively improved” version of the Blackwell chip in August, no such agreement or regulatory framework has been implemented. The administration has not issued the necessary rules for controlled exports.
Nvidia recently sought to bolster its institutional ties, hosting a developer conference in Washington D.C. This move coincided with its market valuation reaching a record USD $5 trillion.
Both Nvidia and rival AMD had agreed to pay the U.S. government 15% of revenues from chips specifically designed for the Chinese market. However, incomplete regulatory conditions have paused these operations.
Washington’s concerns about China’s progress have intensified following the emergence of DeepSeek, a complex and efficient language model from a small Chinese laboratory. Its capabilities sparked debate in Silicon Valley about U.S. firms maintaining their competitive edge.
Analysts cited by the Financial Times suggest China’s combination of rapid development, fewer regulatory barriers, and strong state backing could cement its position as an AI leader before the end of the decade.