nvidia CEO Jensen Huang said Wednesday that the United States is “not far ahead” of China in the artificial intelligence race and said the country needs a “nuanced strategy” to stay on the high ground.
Huang walks a tense line between the two countries and praises Chinese AI models, including Deepseek. alibabaand Baidu. While the U.S. model continues to be more advanced, China’s open source model is “a long way off,” Huang said.
The CEO made several trips to China in July following chip restrictions and warned that Chinese chip systems from companies like Huawei should not be discounted.
President Donald Trump spoke with Chinese President Xi Jinping on the phone in September and announced plans to meet at the APEC Korea Summit in late October.
Here are five important things Huang said about AI racing on CNBC’s “Squawk Box.”
“China is way ahead in energy. We’re way ahead in chips. They’re right there in infrastructure. They’re in AI models.”
Nvidia, widely considered the leading AI chip maker, announced plans in September to invest up to $100 billion in Openai to build AI data centers. But these large investments in computing power require large amounts of energy, and China far outpaces the United States in production.
According to the Energy Research Institute, China generated a total of 10,000 terawatt hours in 2024 (1 trillion watts of electricity in 2024).
“Remember, this is a chip-free country. They have Huawei. They have really sophisticated, really entrepreneurial startups.
The United States may be leading the way in advanced chip designs, including Nvidia’s Blackwell processors, but Chinese tech giant Huawei is under pressure with plans to launch new computing systems to power its in-house Ascend chips over the next year.
China is reportedly banning tech companies from using Nvidia chips and instead focusing on advancing domestic chips to challenge Nvidia processors. Alibaba and Baidu have reportedly started using internally designed chips to train their AI models.
“Applications in China are moving very fast. This is an area that I’m very concerned about.”
Huang said China’s underregulation at the industrial level has made the country “quick to adopt new technologies.”
According to the directives of the Chinese state legislature, the country aims to reach 70% of the population by 2027 by infusing various agents and other applications across core industries.
“I hope that American companies in American society will be faster in adopting AI applications, because ultimately this industrial revolution will win at the diffusion layer of the AI application layer,” Huang said.
“The Chinese market is big. They have a billion users, so it’s not a market that can easily decide to walk away from whether America is your ultimate goal to win the AI race.”
China accounts for 50% of the world’s AI researchers and 30% of the technology market, Huang said.
The country’s stocks have seen a strong rally as confidence in its chip progress and AI development rises. The Chinese market has seen a huge boom as tech companies see their stock prices growing by more than triple digits over the past year.
Alibaba’s stock is up about 180% for the year, while electronics giant Xiaomi’s stock has increased by 125%.
“We’re essentially isolating American technology to America, confiscating the world to everyone else, and competing.”
Huang pointed to developing the American technology stack to capture AI developers and markets globally, and warned that the United States will fall behind if American technology is not allowed to “spread and proliferate around the world.”
CEO sacked comments from White House AI advisor on technology landscape in five years.
“When America, the American tech stack, is 80% of the world, we are doing a great job in the AI race. When the US is 20% of the world, we have lost the AI race,” Huang said.
Huang also introduced companies like Azure. coreweaveand artificial AI are playing a key role in revolutionizing the entire technology stack.
