Investing.com -- NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang sharply criticized U.S. export restrictions on AI chips, warning that the rules are diminishing America’s technology leadership while inflicting heavy financial damage on the company. “If the goal of the diffusion rule is to ensure that America has to lead, the diffusion rule as it was written will exactly cause us to lose our lead,” Huang said in a recent Stratechery interview.
The company has been barred from selling advanced chips like the H20 to China, a key market for its AI infrastructure. As a result, Huang revealed that NVIDIA wrote off $5.5 billion in inventory and forfeited approximately $15 billion in sales.
“No company in history has ever written off that much inventory,” Huang said. “We walked away from $15 billion of sales and probably... $3 billion worth of taxes.”
Huang argued that cutting off China risks unintentionally strengthening rival ecosystems by forcing them to innovate domestically beyond U.S. influence. “If we don’t compete in China, and we allow the Chinese ecosystem to build a rich ecosystem because we’re not there to compete for it… their leadership and their technology will diffuse all around the world,” he warned.
He emphasized that AI is a “full stack” technology and cannot be regulated effectively by restricting just one layer, such as semiconductors. “You can’t just say, ‘Let’s go write a diffusion rule, protect one layer at the expense of everything else,’ it’s nonsensical,” he added.
Instead of limiting exports, Huang urged policymakers to focus on expanding the global reach of American platforms and technologies. “The idea of AI diffusion limiting other countries’ access to American technology is a mission expressed exactly wrong, it should be about accelerating the adoption of American technology everywhere before it’s too late,” he said.