Investing.com-- NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang said on Wednesday that U.S. export restrictions on artificial intelligence chips to China had failed to prevent Beijing’s advancements in the industry, pushing businesses towards locally-developed silicon.
“I think, all in all, the export control was a failure,” Huang told reporters at Taiwan’s Computex conference. “The export control gave (local companies) the spirit, the energy, and the government support to accelerate their development.”
Huang also noted that Nvidia’s market share in China slumped to 50% from 95% seen during the start of former U.S. President Joe Biden’s administration.
Biden had overseen a slew of restrictions on the export of crucial AI tech to China, with President Donald Trump having largely maintained or even deepened the restrictions.
The U.S. Department of Commerce had last week issued new guidance aimed at further restricting China’s chip industry, with the agency stating that use of certain chips from Huawei violated U.S. export laws.
China decried the guidance, accusing the U.S. of bullying and violating international law. China also warned that the U.S. chip controls threatened to undermine a recent trade truce between the two countries.
Nvidia was blocked from selling its most advanced AI chips in China by the Biden administration, and until this year, was selling a lower-spec H20 chip, which was still heavily used by Chinese companies.
But new Trump-era export controls now block Nvidia from selling the H20 in China, with the company reportedly developing a new chip in line with U.S. regulations.
The U.S. restrictions saw Chinese firms turn to locally produced alternatives, specifically from Huawei. China was also seen aggressively investing in local chipmaking, ramping up the foundry capacity of major producers such as Semiconductor Manufacturing International Corp (HK:0981).
China still represents a major market for Nvidia, with the company having recently committed to a new research and development center in Shanghai.