^{Photo: South China Morning Post}

Nvidia CEO Jensen Huang has once again found himself at the center of the debate over who will dominate the future of artificial intelligence. Speaking at the Financial Times Future of AI Summit, Huang reportedly remarked that “China is going to win the AI race” — a comment that immediately drew global attention given the intensifying technological rivalry between the world’s two largest economies.

However, just hours later, Nvidia issued a clarification on the company’s official X (formerly Twitter) account, where Huang softened his tone. “As I have long said, China is nanoseconds behind America in AI,” he noted. “It’s vital that America wins by racing ahead and winning developers worldwide.”

A Swift Clarification Following Controversy

Huang’s remarks at the summit — suggesting that China’s lower energy costs and looser industrial regulations could help it outpace the U.S. — were quickly interpreted as a warning that America’s overregulation might slow innovation. Yet his follow-up statement sought to emphasize the importance of competition and continued U.S. leadership in AI development.

The quick turnaround highlights the delicate balance Nvidia must maintain: protecting its massive business interests in China while aligning with Washington’s ongoing push to secure technological dominance.

How U.S. Policy Shifts Have Hit Nvidia

Huang’s recent statements come as Nvidia faces mounting challenges from both sides of the Pacific. In July, the CEO met with U.S. President Donald Trump, lobbying for more flexibility in chip exports to China. Shortly after, Washington introduced a compromise allowing Nvidia and AMD to continue selling certain AI processors to China, provided they paid a 15% levy on Chinese revenues to the U.S. government.

Despite the partial easing, Beijing responded with a hard line. It launched a national security review of Nvidia’s chips, effectively freezing the company’s access to the Chinese market. Huang later confirmed that Nvidia’s China market share has “fallen to zero.”

China, meanwhile, has accelerated efforts to develop domestic AI chips, heavily subsidizing local companies such as Huawei’s Ascend series and Biren Technology. Analysts from IDC estimate that Chinese firms could collectively produce up to 40% of the nation’s AI chips by 2026 — signaling Beijing’s determination to achieve self-reliance in advanced semiconductor technology.

A Growing Divide Between Regulation and Innovation

Huang has repeatedly warned that the U.S. and Europe risk stifling innovation with excessive red tape. “The West is being held back by cynicism and regulation,” he reportedly told the Financial Times, contrasting this with China’s aggressive government-backed incentives that reduce costs for developers and manufacturers.

Industry analysts have echoed his concerns. According to a 2025 McKinsey report, energy costs for AI data centers in China are roughly 25% lower than in the U.S., largely due to government subsidies for renewable and coal-blended power sources. This allows Chinese firms to run large-scale AI training systems at significantly lower costs.

Behind the Scenes: Nvidia’s Balancing Act

Huang’s visit to South Korea last month — coinciding with the meeting between Trump and Chinese President Xi Jinping — further underscored his strategic tightrope walk. According to The Wall Street Journal, Trump’s team had considered discussing Nvidia’s request to resume sales of its new AI chips to China, but senior officials reportedly pushed back, citing national security concerns.

As Nvidia’s China prospects dim, Huang appears to be pivoting toward strengthening partnerships in regions like South Korea, Japan, and Singapore, where governments are investing heavily in AI infrastructure. Nvidia recently announced plans for a $3 billion AI research hub in Seoul, aimed at supporting regional developers and cloud providers.

The Bigger Picture: The Global AI Race Intensifies

Despite recent setbacks, Nvidia continues to dominate the global AI chip market, commanding more than 80% of the data center GPU segment as of Q3 2025. Yet the stakes have never been higher. With China accelerating its domestic chip production, and the U.S. tightening export controls, the competition is evolving into a full-scale geopolitical contest.

Huang’s tempered remarks reflect this new reality: a race where speed, policy, and partnerships will determine who leads the next era of artificial intelligence. While China may have the cost advantage, the U.S. still holds the edge in cutting-edge innovation — provided it can “race ahead,” as Huang insists.

Bottom Line

Jensen Huang’s shifting tone reveals both the complexity of Nvidia’s global position and the fragile state of U.S.–China tech relations. His message is clear: the AI race is far from decided — but America’s success depends on its ability to innovate faster, attract global developers, and navigate an increasingly fractured world of technology and trade.