Nvidia CEO Touts AI Chips Export Controls as a Failure

The biggest loser on export controls on artificial intelligence chips is the US. That’s the sentiment NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang echoed on May 21 as he insisted the US is losing big amid the restrictions. The remarks come on the chip giant paying the biggest price for being restricted from selling advanced chips to clients in China.

A close-up view of a computer motherboard with integrated semiconductor chips.

“All in all, the export control was a failure,” Huang said. According to Huang, the export control restrictions have only forced Chinese companies to buy semiconductors from local designers such as Huawei at the expense of US companies. The net effect has been a loss of billions of dollars in revenues for US companies.  In addition, Nvidia has warned that the US stands to lose its dominance in AI as Chinese companies resort to aggressively investing in developing supply chains that don’t rely on the US.

Nvidia has experienced a significant decline in market share in China due to the export controls from 95% to 50%. The decline is expected to continue as Chinese companies increasingly develop their AI chips and other alternative solutions. The loss of market share is the catalyst behind the stock underperforming after years of blockbuster gains. The stock is already down by about 2% for the year.

While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NVDA and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.