US export rules bar the sale of high-power AI chips to China and Russia over fears they could be used to power military applications.
While Nvidia was able to take advantage of the recently relaxed export rules on intermediaries like Saudi Arabia, Huang said the reasoning behind the order has “proven to be fundamentally flawed”.
“The local companies are very talented and determined, and the export control gave them the spirit, the energy and the government support to accelerate their development,” Huang said to gathered media at the annual Computex event in Taiwan.
The export restrictions, officially labelled the AI Diffusion Rule, were first introduced under President Biden and were extended in late December to cover equipment used to manufacture semiconductors.
The loss of access to China heavily hampered Nvidia, which was one of the company’s most important markets, having previously accounted for around 26% of its turnover.
It’s been trying to develop slower hardware so it can still ship chips to China, including the H20 GPU. However, the Commerce Department effectively shut the door on the H20 after it recently said Nvidia would need to apply for a specific export license for the model, making it tougher to ship the hardware.
Chinese AI firms remain keen to access their hardware, with previous reports suggesting local AI developers even resorted to repurposing Nvidia’s gaming graphics cards to power their workloads.
The demand for Nvidia is compounded by the reported failures of alternatives, like Huawei's Ascend AI chips, to convince several firms to switch. The Chinese government has since pushed to support a domestic GPU market, going as far as to probe Nvidia over its alleged market monopoly.
Even DeepSeek, the Chinese-made AI model that upended the tech world at the turn of the year, was developed using slower Nvidia hardware, the H800, a revised version of the H100 designed for the Chinese market, which is now also barred under the export rules.
Despite relaxing rules on intermediaries, the Trump administration pushed the AI Diffusion Rule further by clamping down on Chinese-made hardware, with plans to make it so that using Huawei’s Ascend chips anywhere in the world would violate US export controls.
Chinese officials decried the move earlier this week, calling on the US to “immediately correct its wrongdoings” as it described the measure as “discriminatory”.
RELATED STORIES
Nvidia, AMD ink Saudi AI deals as US eases export curbs
US eases AI chip exports for allies, cracks down on Huawei hardware
Nvidia to manufacture Blackwell chips, supercomputers in US amid tariff pressures
