China 'nanoseconds behind' US in chip race, says Nvidia's Jensen Huang

Nvidia chief Jensen Huang highlighted the need for vibrant competition as Huawei, ByteDance ramp up semiconductor development in China

Allowing US companies such as Nvidia to compete in China serves the interests of both Beijing and Washington, said Jensen Huang, the US chipmaker’s founder and chief executive officer, according to a report by The South China Morning Post.

 

China is “nanoseconds behind” the US, “so we’ve got to go compete”, Huang said on BG2, a podcast hosted by tech investors Brad Gerstner and Bill Gurley.

 

“This is a vibrant, entrepreneurial, hi-tech, modern industry,” he said, highlighting the country’s deep pool of talent and intense competition across its provinces. Huang added that he hoped and believed China would stay open to foreign investment, noting that Beijing had pledged to maintain “an open market”.

 

US curbs on chip exports

 

California-based Nvidia, the world’s most valuable company, is barred from exporting to China its most advanced chips that are crucial for developing artificial intelligence. Earlier this year, the US abruptly halted exports of the H20 -- a downgraded chip designed to comply with restrictions -- before reversing the decision after a 15 per cent levy to the US government was agreed.

 

“What’s in the best interest of China is for foreign companies to invest in China, compete in China and for them to also have vibrant competition themselves,” Huang said in the episode released on Friday. “They would also like to come out of China and participate around the world.”

 

Nvidia’s graphics processing units (GPUs), considered the backbone of training and running artificial intelligence (AI) models, have helped drive the company’s market capitalisation to record highs.

 

Alibaba, ByteDance push domestic alternatives

 

Chinese AI and semiconductor players have stepped up efforts to launch home-grown alternatives, chipping away at Nvidia’s once-dominant market share.

 

Major internet firms that are also leading cloud-services providers -- including Alibaba Group Holding, Tencent Holdings, ByteDance and Baidu -- are investing heavily in chip research and design through in-house projects or external partnerships to strengthen control over their supply chains.

 

Sanctioned telecom giant Huawei Technologies this month unveiled its long-awaited AI chip road map, presenting clustering methods aimed at bypassing Nvidia as well as advanced manufacturing techniques that remain beyond China’s current capabilities.

 

‘Everybody needs AI’

 

On the podcast, Huang dismissed concerns that the AI sector faces a capacity glut. “Until we fully convert all general-purpose computing to accelerated computing and AI… I think the chances [of a glut] are extremely low,” he said. “Nobody needs atomic bombs. Everybody needs AI.”

 

Nvidia has recently announced a series of major investments, including a $5 billion purchase of a 4 per cent stake in Intel and plans to invest up to $100 billion in OpenAI over the coming years to develop AI data centres.