Nvidia Chief Warns of “Enormous Damage” Risk to US Tech from Chip Wars with China

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Tech News Summary:

  • The CEO of Nvidia has warned that the ongoing chip battle between Beijing and Washington could cause enormous damage to the US tech industry.
  • New US export controls have left Nvidia unable to sell advanced chips in one of its largest markets in China, while Chinese firms have started developing their own chips to compete with Nvidia’s market-leading processors for gaming, graphics and AI.
  • If US companies were deprived of access to the Chinese market, there would be a significant impact on their bottom lines, while further restrictions on trade with China could also undercut the Biden administration’s efforts to encourage more chip facilities in the US.

The ongoing chip wars with China are posing an enormous risk to the technology industry in the United States, warned Jensen Huang, CEO of Nvidia. In a recent interview with CNBC, Huang expressed his concern over the deteriorating relationship between the US and China, which is fueling the chip wars, a trade conflict that has been raging for months now.

According to Huang, the chip industry is critically important to both the US and China. China is currently the world’s largest consumer of semiconductors, with a market worth over $300 billion. The US, on the other hand, is one of the largest producers of chips. However, the escalating tensions between the two countries have led to fears that China could soon become a major competitor to the US in the semiconductor market.

“From a Western technology company point of view, you have to ask yourself, when you sell your product to a Chinese company, you might be inadvertently contributing to the Chinese defense industry,” Huang said. “That’s a terrible thing to do.”

Huang’s comments come on the heels of a recent report by the Semiconductor Industry Association, which warned that the ongoing chip wars are posing a significant threat to the US tech industry. The report highlighted the fact that China is investing heavily in its own semiconductor industry, with the aim of reducing its dependence on foreign chipmakers. This, in turn, could hurt US companies that currently supply chips to Chinese firms.

The chip wars have already led to some high-profile casualties, with Chinese tech giant Huawei being blacklisted by the US government. The move has severely restricted Huawei’s access to key components, such as semiconductors, and has hampered the company’s ability to launch new products.

Huang believes that the chip wars could lead to long-term, irreparable damage to the tech industry in the US. He urged policymakers to work towards finding a resolution to the conflict before it’s too late.

“The longer that this goes on, the more the industry will get bifurcated,” Huang said. “And the more it is bifurcated, the more harm both sides [will] suffer.”

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