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Nvidia CEO Jensen Huang has warned that China could overtake the US in the race for artificial intelligence (AI) because of its cheaper energy costs and fewer regulations, the Financial Times reported.
“China is going to win the AI race,” Huang told the newspaper on the sidelines of the Financial Times‘ Future of AI Summit. FT reported that the Nvidia chief said that the West, including the US and UK, was being held back by “cynicism,” singling out new rules on AI by US states that could result in “50 new regulations”.
He added that one key challenge to the chipmakeindian exper comes from the Chinese approach of offering energy subsidies to domestic companies, which makes it more affordable for them to run Chinese alternatives to Nvidia’s AI chips.
Huang later softened his stance, saying that “China is nanoseconds behind America in AI. It’s vital that America wins by racing ahead and winning developers worldwide”.
As Nvidia has become perhaps the most important company at the heart of the AI gold rush, the company fears that geopolitical tensions between the US and China, resulting in export control orders, could hurt it as it risks losing access to a vast pool of AI developers in China. It is undeniably a massive market for Nvidia, and could further boost its ever rising stock price.
In October, the head of Nvidia, the world’s leading maker of AI chips, said the US could win the global race in artificial intelligence if developers worldwide — including those in China — continue to use Nvidia systems. However, he noted that China’s government has blocked the company from its market.
China’s limited access to advanced AI chips from Nvidia has become a key point of tension in its tech rivalry with the US, as both countries compete for dominance in high-end computing and artificial intelligence.
In an interview Sunday, US President Donald Trump said that Nvidia’s most advanced Blackwell chips should be reserved exclusively for American customers. He added that while Washington would allow China to engage with Nvidia, it would not be in terms of the most advanced semiconductors.
Reuters reported that China has issued guidance requiring new data centre projects that have received any state funds to only use domestically-made AI chips, in a move to eliminate foreign technology from the country’s critical infrastructure.
As Nvidia finds itself caught in the crosshairs of the ties between the US and China, an investment frenzy in the AI space has gripped the United States, as large corporations throw their weight and money behind AI companies.
Amazon recently signed a multi-year agreement worth $38 billion with OpenAI under which the e-commerce company will provide the ChatGPT maker access to hundreds of thousands of Nvidia processors to train and run its artificial intelligence models. In March, Amazon had invested $4 billion in Anthropic, doubling its investment in the OpenAI competitor.
Last month, AMD said it will supply artificial intelligence chips to OpenAI as part of a multi-year deal, and give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker.
In September, Nvidia announced that it will invest up to $100 billion in OpenAI, supply it with data center chips, and take a financial stake in the AI company. OpenAI is already among Nvidia’s most important customers.
Nvidia is also investing $5 billion in its struggling rival Intel, and the two will work to develop personal computers and data centre chips.
OpenAI is reported to have signed a deal with software giant Oracle to purchase $300 billion in computing power over roughly five years. OpenAI, Softbank, Oracle, Microsoft and Nvidia are coming together to build artificial intelligence (AI) infrastructure for OpenAI in the country. An investment of $500 billion is expected to be made in a new company — Stargate Project — to fuel this expansion over the next four years.
