Why Nvidia is blasting US export controls as a failure

US chip export controls have been "a failure," Nvidia CEO Jensen Huang told a tech forum on Wednesday, as the Chinese government separately slammed US warnings to other countries against using Chinese tech.

Beginning with Donald Trump's first term and being overwhelmingly expanded by Biden's, and then continued again into the second Trump administration, the United States has imposed an ever-growing blockade on the export of high-end semiconductors and chips to China. These measures have targeted thousands of specific companies individually, but also sometimes entire sectors, as well as the equipment dedicated to producing such technology.

US foreign policy makers argue that the growing technological embargo against China will ultimately contain and prevent Beijing's rise by depriving its access to strategically competitive technology, which will allow the US not only to have a military advantage over China, but additionally prevent Chinese companies from developing high-end technological products which subsequently displace American ones in global markets. Because of this, such chip restrictions have become a strategic keystone for the White House, who also routinely push third-party chipmaking countries such as Japan or the Netherlands to join in.

However, if the United States wants to stay ahead of China, why does the policy of competition manifest as embargos? Why do US foreign policymakers believe that restricting chip sales to China, and thus cutting them off from core supply chains is the answer? Because as the boss of Nvidia said, "the local companies are very, very talented and very determined, and the export control gave them the spirit, the energy and the government support to accelerate their development," and thus "I think, all in all, the export control was a failure," noting that "China has a vibrant technology ecosystem, and it's very important to realize that China has 50 percent of the world's AI researchers, and China is incredibly good at software."

It's fair to say that Mr Huang's comments are completely out of touch with how US strategists and officials see the situation. The American view on Chinese technology is actually blinded by ideological and cultural prejudice, at the heart of all these embargo strategies is one fatal assumption: "China can't innovate." In the binary US political mind, China is politically rigid and its society lacks critical thinking and creative capabilities in contrast to the individualist United States.

Worse still, US politicians continually parrot a completely ignorant and falsified narrative that every single market and technological achievement of China is simply a product of intellectual property theft, which is not just an ideological but a racial stereotype. Now of course, the ideological part at least on a historical basis is not entirely untrue, as in the first Cold War it is essentially correct that the moribund system of the former Soviet Union dulled its economic development and made it difficult for them to keep up in high-end military technology, thus giving the US the upper hand toward the closing decade of the geopolitical struggle.

However, the mistake that Americans make is that China is not like the Soviet Union, and these stereotypes are untrue. China is Communist, but its economy operates pragmatically on a market dynamic, and it also has an increasingly highly educated society buttressed by an extremely competitive university culture. Just because China is in a different political system from the West, does not account for the fact that socially and commercially China is in fact a very competitive country on every level.

Chinese society is in some way more conservative than the West, but this only reinforces rather than negates the competitive element. Communism does not define the lives of Chinese people, getting a good education, jobs, livelihood and family obligations do, and that doesn't happen without fierce effort, which is the real reason why China's scientific and technological descent has been massive. China produces more scientific papers than any other country in the world now, and thus successive rounds of US tech embargos haven't had the impact its leaders believe they have.

That's because America has deluded itself that China cannot innovate, having absorbed the MAGA view that China's entire rise and every achievement is "an exploitation" of them. It is no wonder this doesn't translate into policy outcomes, and that's why Nvidia, who is losing billions in market share because of these insane US policies, is the biggest loser. America thought chipmaking was an exclusive club that they hold the keys too and if they only as much lock the door China can be kept out, they're in for a shock.

(The author, a postgraduate student of Chinese studies at Oxford University, is an English analyst on international relations. The views are his own.)