Nvidia CEO: China Can Thrive Without American Chips in Military Applications

CEO of Nvidia, Jensen Huang, has downplayed U.S. concerns regarding the use of the company’s chips in China’s military sector ahead of his upcoming trip to the country.

He stated that the Chinese military is unlikely to rely on technologies produced in the U.S. because «they simply cannot depend on them.» Huang pointed out that access can be restricted at any moment, and China already possesses sufficient computing power. «They do not need Nvidia chips, nor do they require American tech stacks to enhance their military capabilities,» he emphasized.

For several years, the U.S. has imposed restrictions on semiconductor manufacturers, preventing them from exporting advanced AI processors to China. The latest restrictions were implemented in April when Nvidia was required to obtain a license for exporting its H20 chips. In response, the company began developing an AI chipset for the Chinese market at a significantly lower price, as reported by the media.

In the first quarter, Huang’s company incurred losses of $4.5 billion due to excess H20 inventory and missed out on $2.5 billion in potential additional sales. Despite what he termed the «effective closure of the Chinese market,» Nvidia became the first company in history to achieve a market capitalization of $4 trillion.

Huang reiterated his criticism of this policy, stressing that export controls counteract their intended purpose of maintaining U.S. technological leadership. «We want the American technology stack to become the global standard. To achieve this, we need to cooperate with AI developers worldwide. Half of them are based in China,» he stated.

This interview took place just days before Huang’s second visit to China this year. On July 10, he met with President Donald Trump at the White House. Concurrently, American lawmakers cautioned him against engaging with companies linked to China’s military or intelligence sectors or those on restricted export lists.

According to Reuters, the AI startup DeepSeek assists China’s military and intelligence operations, citing a senior U.S. official. «We understand that DeepSeek has willingly provided and is likely to continue supporting China’s military and intelligence efforts. These activities extend beyond merely providing access to the company’s AI models,» said a source from the State Department.

The agency reported that DeepSeek has attempted to use shell companies in Southeast Asia to access advanced and restricted semiconductors. «It is trying to gain access to data centers in the region for remote access to American chips,» stated the source.

In Washington, there is growing confidence that the capabilities of the rapidly expanding Chinese startup are overstated and heavily rely on American technology. «We do not support entities that have violated U.S. export controls or are on American organization lists. With the current export restrictions, we have effectively exited the Chinese data center market, which is now served only by competitors like Huawei,» Nvidia commented.

Under Chinese law, companies operating in the country must provide data to the government upon request. U.S. authorities have previously stated that DeepSeek is transmitting personal information of American users to China via «internal infrastructure» linked to the telecommunications provider China Mobile.

Furthermore, the startup has been mentioned over 150 times in procurement records for the People’s Liberation Army (PLA) and other organizations associated with the defense industrial base, according to Reuters. The firm is also employing loopholes in U.S. export controls to obtain advanced chips, having gained access to «large volumes» of H100 processors, which have been restricted since 2022.

China views AI as a crucial factor in future conflicts and is aiming to transition to a concept of «intelligent» warfare. Key areas of focus include military AI development in close cooperation between the state and private sector, with direct oversight from national leadership.

While funding details for military AI programs in China remain partially classified, available estimates suggest that investment levels are significant. Research by the Center for Security and Emerging Technologies indicates a minimum annual expenditure of about $1.6 billion on AI-enabled system acquisitions. Real spending is likely higher, as much of the investment is hidden within R&D and classified programs.

Today, China and the U.S. are effectively engaged in an arms race in the field of artificial intelligence. The Chinese military is rapidly integrating AI across a wide range of applications—from drone platforms to data analysis—in an effort to catch up with or surpass the U.S. However, America still leads in several critical technologies and is taking steps to maintain its dominance.

Both nations are making substantial investments in military AI, recognizing that control over these technologies will significantly influence the balance of power and security landscape in the 21st century.

In a remote desert area of the northwestern Xinjiang region, China is constructing dozens of data centers to house its processors. Companies from China plan to acquire over 115,000 advanced Nvidia chips to power these new facilities and further train their AI models.