The U.S. government has imposed export controls on chips to mainland China, aiming to stifle its burgeoning chip sector. However, experts contend that such measures have, in fact, spurred China's pursuit of chip self-sufficiency. Jensen Huang, CEO of Nvidia, has criticized the U.S. policy that restricts the export of AI chips, labeling it a misstep. He asserts that China's chip industry is merely 'a few nanoseconds' behind the U.S. and boasts enormous potential.

Huang has urged the U.S. to permit tech firms to compete unhindered in markets, including mainland China, to bolster U.S. influence. He also believes that the Chinese market will continue to welcome foreign investment. Amidst this context, Nvidia intends to restart shipping its H20 AI GPU to Chinese clients and is working on new chips that adhere to the restrictions.

Concurrently, China is expediting its plans for chip self-sufficiency. Huawei's latest system, equipped with Ascend chips, is already being shipped in large quantities. Additionally, hyperscale companies are investing in custom chips, presenting a formidable challenge to Nvidia's market dominance. Nvidia's strategy revolves around solidifying its presence in the Chinese market. Although the H20 may exhibit slightly lower performance, it can sustain the link between Chinese enterprises and Nvidia's ecosystem.