Nvidia’s slump continues even after Jensen Huang softens his statement that “China is going to win the AI race”
Different words, same message.
Nvidia ended Wednesday’s session with a late-day drubbing, which was followed by an article from the Financial Times in which CEO Jensen Huang said, “China is going to win the AI race” because its regulatory environment and ability to access power is more supportive of the industry’s growth.
Nvidia’s official newsroom account on X put out a softened, more sanitized statement attributed to Huang on this topic hours later on Wednesday evening:
“As I have long said, China is nanoseconds behind America in AI. It’s vital that America wins by racing ahead and winning developers worldwide.”
To translate: the AI race between the US and China is tight, and it’s vital that America wins by winning.
The unwritten subtext is still the same: “China is going to win the AI race” — without having access to Nvidia’s flagship GPUs, or even wanting its nerfed chips!
Shares of the chip designer are down 1.7% as of 10:36 a.m ET.
It’s interesting thinking through who Huang’s audience for both sets of remarks is. The initial statement is likely aimed at the Trump administration in a bid to reinforce the urgency of the power demands of the AI boom.
The administration appears to have already been moving in this direction, with US Energy Secretary Christopher Wright reportedly looking to speed the approval process for data centers to connect to the power grid.
Microsoft CEO Satya Nadella recently said his biggest problem today is “not a supply issue of chips; it’s actually the fact that I don’t have warm shelves to plug into.”
The second statement is likely aimed at quelling alarm from anyone worried too much about the first statement!
Two things can be true, I suppose: China may be poised to race ahead of the US in AI, as Huang warned, and Nvidia’s business in China getting turfed has not stopped the chip designer from being the biggest AI-linked stock market winner. Last week, Nvidia noted that it’s received more than $500 billion in orders for its Blackwell and Rubin chips through 2026.
After the Trump administration banned the sale of Nvidia’s H20 chips to China, Jensen Huang spent a lot of time trying to convince President Trump of the importance of companies around the world (China included!) operating on his company’s CUDA software platform. Those efforts bore fruit, as export restrictions were lifted. But in the process of trying to win over hearts and minds, Huang may have also convinced Chinese President Xi as well, spurring renewed efforts from China to bolster its domestic AI capabilities in both hardware and software and shift away from Nvidia’s offerings.
(As an aside, Wednesday’s late-day slump in Nvidia had all the makings of a “someone knows something” move: though the FT story in question wasn’t published until 4 p.m. ET, shares of the chip designer were soft throughout the last hour of trading, with selling accelerating 10 minutes ahead of the close.)
