
NVIDIA CEO Jensen Huang has praised US President Donald Trump for scrapping a regulation limiting the number of advanced artificial intelligence chips it could sell to certain countries. He described the AI diffusion rule as a “failure” at a press conference at Taiwan’s Computex tech expo, according to Reuters.
Former US President Joe Biden’s administration designed the rule to keep advanced chips out of China’s hands, and it was scheduled to go into effect on May 15. All global nations were divided into three tiers:
- A white list of allied countries with no restrictions.
- A black list of disallowed adversaries.
- A third tier that could buy a limited number of advanced US chips.
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However, on May 13, the Trump administration rescinded the AI diffusion rule. At the press conference, Huang argued that the “competition in China is really intense” and does not rely solely on American technology, so AI export controls would prove ineffective in hindering its progress.
In fact, he said that China “would love for us never to go back” because, by removing itself from the market, the US would eliminate itself as a competitor. “President Trump realises it’s exactly the wrong goal,” he said, per Reuters.
AI diffusion rule would damage NVIDIA’s business
While Huang argued that the AI diffusion rule would harm the US by giving China an edge in the AI race, he also had a vested interest, as the policy directly threatens NVIDIA’s business in a key market. Its China market share has dropped to 50% from 95% since the start of Biden’s administration, he said at the press conference, due to various export controls they imposed.
NVIDIA has been designing chips to avoid these controls since 2022 to maintain its business in the country. Most recently, the US blocked sales of certain advanced chips to China without a license, including NVIDIA’s H20, but it is now working on a Blackwell AI chip that will avoid that requirement, according to Reuters.
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The removal of the AI diffusion rule will also unlock new business for NVIDIA outside of China. It made it possible for the US chipmaker to sell 18,000 of its most advanced AI chips to Saudi Arabia, and Amazon and AMD have also since struck deals with the country. In the past, relationships between the Saudi Arabian and US tech trade have been chillier due in part to concerns that chips moved between the countries could leak to China.
NVIDIA has criticised the AI diffusion rule for months, but Anthropic supported it
In January, NVIDIA called the AI diffusion rule misguided, a sentiment echoed by Microsoft. However, Anthropic, an AI startup backed by billions from Amazon, endorsed the export restrictions and even wanted them to be extended. AI should be developed in “alignment with American values and interests,” as opposed to China’s, it argued in a blog post.
NVIDIA fired back at Anthropic in a rare public rebuke, with a spokesperson telling CNBC, “American firms should focus on innovation and rise to the challenge.” They also accused Anthropic of pushing policy to suppress competition rather than earn leadership through innovation.
US remains determined to curb China’s AI progress
Despite removing the AI diffusion rule, concerns about China remain.
Following the announcement, the federal government reminded organisations not to use Ascend AI chips from Chinese company Huawei, warned against “allowing U.S. AI chips to be used for training and inference of Chinese AI models,” and planned to issue guidance for US companies on how to “protect supply chains against diversion tactics.”
A statement from China’s Ministry of Commerce described these measures as “discriminatory” and urged the US to “immediately correct its wrong practices.” According to Reuters, the US is considering replacing the AI diffusion rule with a global licensing regime based on government-to-government agreements, aiming to strengthen its position in trade negotiations.