Adapted by:
Javier Pastor
Senior WriterComputer scientist turned tech journalist. I've written about almost everything related to technology, but I specialize in hardware, operating systems and cryptocurrencies. I like writing about tech so much that I do it both for Xataka and Incognitosis, my personal blog.
Alba Mora
WriterAn established tech journalist, I entered the world of consumer tech by chance in 2018. In my writing and translating career, I've also covered a diverse range of topics, including entertainment, travel, science, and the economy.
In September 2022, the U.S. intensified its trade war with China by banning the export of advanced AI chips to the Asian nation. The goal was to safeguard the U.S.’ capacity for innovation while also aiming to hinder China’s technological progress. However, this move turned out to be a complete misstep.
Nvidia is bearing the brunt. At the Computex tech show on Wednesday, Nvidia CEO Jensen Huang strongly criticized the ban and other subsequent measures. “Four years ago, Nvidia had 95 per cent market share in China. Today, it is only 50 per cent. The rest is Chinese technology. They have a lot of local technology they would use if they didn’t have Nvidia,” he explained.
The opposite effect. Huang added that the export ban has had the opposite effect of what was intended. According to him, these measures have inadvertently inspired China to innovate. He said, “Export controls gave [China] the spirit, and government support accelerated their development. Our competition is intense in China.”
The H20 chip problem. The H20 chip has proven to be a significant setback for Nvidia. This chip is a “trimmed down” and less capable version of the company’s most advanced models, developed specifically for the Chinese market. Although Nvidia was permitted to export the H20 chip to China throughout 2024, the government banned these sales in April.
As a result, Nvidia faced a loss of $5.5 billion. The company is now attempting to recover from this blow by introducing a new version that won’t be based on the Hopper architecture.
The U.S. should back up. Huang believes the U.S. should reconsider its strategy. “If the U.S. wants to stay ahead, we need to maximize and accelerate our diffusion, not limit it,” he said. The government is preparing to revise the AI Diffusion Rule issued by former President Joe Biden in January 2025. The rule further restricts exports of AI hardware and software to China.
CUDA is being challenged. Hardware is no longer the main issue. There’s a big concern regarding CUDA, which is the industry standard for developers of AI software solutions. Huawei offers an alternative called CANN, but several Western companies could also reduce CUDA’s dominance. These include Intel and OpenAI. AMD is another example. Some of its chips are technically superior to Nvidia’s, but often perform worse due to inferior software.
China is unbothered. Notably, the U.S. strategy has had a remarkable impact in China, leading to the rapid development of very “socialist” AI models. A prime example is DeepSeek R1. Additionally, Chinese companies are producing impressive AI chips, such as Huawei’s Ascend 910C. The Huawei chip can compete with Nvidia’s H100 CPU. Moreover, preparations are underway for the launch of the new Ascend 910D, which is expected to surpass its predecessor.
Image | Bermix Studio
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