Nvidia CEO Jensen Huang Warns US Lawmakers Are Fueling Rise Of China's Huawei With Their Chip Export Bans

On Thursday, Nvidia Corporation (NASDAQ:NVDA) CEO Jensen Huang told U.S. lawmakers that export restrictions on AI chips may be helping China's Huawei Technologies gain a competitive foothold in the global artificial intelligence race.

What Happened: In a closed-door meeting with the House Foreign Affairs Committee, Huang and other Nvidia executives raised concerns that U.S. efforts to limit China’s access to cutting-edge chips may be having unintended consequences, reported Reuters, citing a senior Congressional committee staff source.

"If DeepSeek R1 had been trained on [Huawei chips] or a future open-source Chinese model had been trained to be highly optimized to Huawei chips, that would risk creating a global market demand for Huawei chips," a source told the publication.

See Also: Nvidia's Jensen Huang Meets Japanese PM To Discuss AI's Growing Energy Needs

In a statement, Nvidia spokesperson John Rizzo confirmed Huang's meeting with lawmakers, saying he discussed "the strategic importance of AI as national infrastructure and the need to invest in U.S. manufacturing," the report noted. 

Rizzo added that Huang "reaffirmed Nvidia’s full support for the government's efforts to promote American technology and interests around the world."

Why It Matters: On the same day, Nvidia also criticized Amazon.com, Inc. (NASDAQ:AMZN)-backed Anthropic for its allegations related to AI chip export restrictions, urging American firms to focus on innovation instead of making exaggerated allegations, reported CNBC.

Last month, the U.S. government barred Nvidia from selling its H20 chip, designed specifically for the Chinese market, after initial shipments began.

Nvidia expects to take a $5.5 billion hit in the first quarter ending April 27, tied to inventory and purchase commitments for its H20 chip.

Huawei has begun to fill the vacuum left by Nvidia's constrained presence. Last month, it was reported that the Chinese tech giant was preparing mass shipments of its own AI chips as demand for alternatives surged in China.

Price Action: Nvidia shares have declined 19.30% year-to-date but remain up 34.41% over the past 12 months. On Thursday, the stock rose 2.47% to close at $111.61, according to Benzinga Pro.

Benzinga Edge Stock Rankings gives Nvidia a strong growth score of 94.78%. Click here to see how it stacks up against other top tech companies.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.