Nvidia (NVDA, Financials) CEO Jensen Huang said China is closing the gap with the U.S. in artificial intelligence, despite regulatory barriers. Speaking in Washington, D.C., he emphasized that the AI race is ongoing and competitive policy, not restriction, should lead.
The U.S. government recently restricted Nvidia’s shipments of its H20 AI chips to China without a license. The chip was designed to comply with earlier regulations, but Nvidia now expects a $5.5 billion revenue hit.
Huang said Huawei is one of the most formidable technology companies in the world, noting its work on domestic AI chips despite being on a U.S. trade blacklist. He said China may be right behind the U.S. and highlighted the AI competition as a long-term, infinite race.
The CEO said Nvidia aims to build AI servers in the U.S. with Foxconn, with assembly planned near Houston.
Huang’s comments signal that trade restrictions may be insufficient to maintain U.S. leadership if not paired with investment in innovation. He called on U.S. policymakers to focus on enhancing the competitiveness of domestic firms.
Investors will be watching how Nvidia balances domestic production with international demand as regulatory headwinds continue.
This article first appeared on GuruFocus.