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Nvidia CEO Jensen Huang Backs Trump’s Plan to Ease AI Chip Export Curbs

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Nvidia CEO Jensen Huang has strongly criticized U.S. export restrictions on AI chips to China, calling them a “failure” that cost American firms billions in lost sales while accelerating China’s self-reliance in semiconductor development. Speaking at the Computex conference in Taipei, Huang welcomed the Trump administration’s decision to reverse some of the Biden-era controls, signaling a shift that could reshape global tech policy.

“The fundamental assumptions that led to the AI diffusion rule have been proven to be fundamentally flawed,” Huang said, referring to the Biden administration’s three-tiered export control regime, which entirely blocked sales of advanced chips to China.

Impact on Nvidia and U.S. Industry

Since the Biden administration’s controls came into effect, Nvidia’s market share in China fell from 95% to 50%, Huang revealed. Nvidia has been hit particularly hard, taking a $5.5 billion charge in April related to its blocked H20 chip, and Huang now estimates total revenue loss at $15 billion.

Despite these setbacks, Huang noted that AI research in China has continued unabated and is now being powered by local technologies, particularly chips from Huawei and other Chinese semiconductor designers. He estimated that China’s AI market will be worth $50 billion in 2025 and called the competition there “intense”.

“They would love for us never to go back to China,” he said.

Trump’s Strategy: A Shift in Direction

Huang praised the Trump administration’s plan to move away from rigid export tiers and toward a global licensing regime based on government-to-government agreements. The proposed shift could provide the U.S. more flexibility and leverage in trade negotiations while also easing pressure on U.S. tech firms.

“President Trump realises it’s exactly the wrong goal,” Huang said, arguing that isolating China from U.S. tech would not stop AI innovation and only encourage the growth of competitive alternatives.

Nvidia’s Workaround

Nvidia is now developing a new version of its Blackwell AI chip that includes slower memory, allowing it to comply with current U.S. restrictions while still serving key markets.

Rising Tensions

China responded sharply to recent U.S. moves that warned firms against using Chinese-made AI chips like Huawei’s Ascend, urging the U.S. to “immediately correct its wrongdoings.” Beijing warned that such measures violate trade agreements and undermine cooperation, threatening “resolute” countermeasures.

Industry Outlook

While the Biden administration had aimed to contain China’s semiconductor and military advancements, the unintended consequence appears to be a rapid buildup of China’s domestic AI and chipmaking capabilities. Huang’s remarks underscore the growing frustration within U.S. tech circles over policies they say are self-damaging.

Meanwhile, Nvidia continues to dominate the global AI infrastructure market, with new product announcements at Computex expected to further boost its $130.5 billion revenue base.

China’s SMIC Reports Strong Q1 Profit Surge but Warns of Cloudy Outlook Amid Tariffs and Yield Risks

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Semiconductor Manufacturing International Corp (SMIC) posted a strong financial performance in the first quarter, with profit surging 162% to $188 million and revenue rising 28% year-over-year, driven partly by rush orders from U.S. clients seeking to preempt newly imposed tariffs. However, despite the gains, the results missed analyst expectations, and SMIC’s Hong Kong-listed shares dropped 6.8% following a cautious Q2 forecast.

SMIC, China’s largest chip foundry, said it expects revenue in the second quarter to decline by as much as 6%, citing potential challenges from lower production yields as the company integrates new manufacturing equipment.

Key Financials (Q1 2025):

  • Profit attributable to shareholders: $188 million (vs. $222.4M LSEG estimate)

  • Year-over-year profit growth: +162%

  • Revenue growth: +28%

  • U.S. customer contribution: 12.6% of revenue (up from 8.9% in Q4 2024)

Tariff Impact and Industry Risks:
Co-CEO Zhao Haijun acknowledged the escalating U.S.-China trade tensions, noting that although the current impact is limited—thanks to tariff exemptions and a diversified supply chain—uncertainty looms for the second half of the year.

“If customers cut back purchases due to price increases, the sector could face a hard landing,” Zhao warned.

The company remains largely focused on legacy chips for consumer electronics and home appliances, while advanced chips, such as those powering Huawei smartphones, make up a very small portion of its business. SMIC has not confirmed any production ties to Huawei.

Broader Policy Context:

  • The Trump administration in April approved tariff exclusions on selected Chinese electronics including smartphones, computers, and memory chips, partially easing import pressures for U.S. firms.

  • Meanwhile, Chinese authorities have granted exemptions on some semiconductor imports and are in active talks with the domestic chip sector to mitigate the trade war’s impact.

Despite its strong Q1, SMIC’s outlook reflects the fragility of the global semiconductor supply chain in a climate of geopolitical tension, policy shifts, and technological transition—especially as it scales new equipment and process nodes.