SOURCE / ECONOMY
Amid Trump’s talks with Nvidia’s Huang, Chinese experts emphasize stronger trade bonds
Published: Feb 01, 2025 09:37 PM
Photo: VCG

Photo: VCG



Cooperation is a key driver of innovation, and weakening the strong commercial and trade relationships between nations will lead to self-defeating results, a Chinese expert told the Global Times on Saturday following the first meeting between US President Donald Trump and the CEO of Nvidia Jensen Huang at the White House.
 
The two discussed tightening AI chip export controls during their meeting at the White House on Friday, Reuters reported, citing a source familiar with the matter.
 
Trump reportedly called Huang a "gentleman."
 
"Jensen and the president discussed the importance of strengthening US technology and AI leadership," an NVIDIA spokesperson said in a statement to Investing.com following the meeting between Huang and Trump.
 
The meeting received extensive coverage in US media, with many reports linking the meeting to the rise of DeepSeek. However, Financial Times reported that two people familiar with the matter said the meeting had been planned before DeepSeek's breakthroughs in AI, which required far less computing power than comparable models from US tech companies.
 
The conversation between Trump and Huang may reveal the Trump administration's intent to restrict China's AI development by using Nvidia's chip technology as leverage to curb China's AI advancements," Li Haidong, a professor at China Foreign Affairs University, told the Global Times on Saturday.
 
What is clear is that Nvidia cannot afford to abandon the vast Chinese market, Li said. Whether shrinking Nvidia's market presence in China or even fostering Nvidia's Chinese competitors, it is a scenario Huang certainly does not want to see.
 
This creates a tug-of-war: one side seeks to slow China's development, while the other prioritizes market profits. This struggle highlights the significant challenges the US government faces in implementing high-level chip export bans or restrictions against China, the expert said.
 
Tariffs on chips and "things associated with chips" were part of a sweeping plan announced by Trump on Friday for new restrictions on imports from the US's biggest trading partners, according to Financial Times.
 
A report by Reuters on January 30 showed that Trump's administration is considering tightening restrictions on Nvidia's H20 chips designed for the China market, three people familiar with the matter said.
 
Conversations to restrict shipments of those chips to China are in very early stages among Trump administration's officials, the people said, adding the idea has been under consideration since former president Joe Biden's administration. H20 chips can be used to run AI software and were designed to comply with existing US curbs on shipments to China, the report said.
 
China is still Nvidia's biggest customer despite US government-imposed bans and sanctions. The company is still estimated to make $12 billion selling AI GPUs to China in 2024, even though the company is currently limited to selling the Nvidia H20, a report released on Yahoo noted.
 
"From an industrial perspective, US sanctions have instead accelerated the rapid development of China's domestic industries," Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times.
 
Attention on the Hangzhou-based startup began in December of last year following the launch of its large-scale AI model, "DeepSeek-V3." This new model quickly gained traction among AI enthusiasts. DeepSeek is shaking the US' AI sector with its open-source approach and low-cost models, drawing curiosity and significant coverage from US media and AI forums about how this Chinese company has produced competitive AI systems comparable to those developed by US tech giants.
 
NVIDIA's stock has experienced significant declines recently. On January 27, 2025, the company's market capitalization plummeted by nearly $600 billion - the largest single-day loss in US history - following the launch of DeepSeek, according to Reuters.
 
Subsequently, on January 31, 2025, NVIDIA's stock faced additional pressure due to market volatility stemming from new tariffs imposed by the US government on imports from Canada, Mexico, and China, a report by AP said.
 
The US assumes that China's development of AI is entirely dependent on high-end Nvidia chips. However, the reality could be different, Xiang noted.
 
For instance, China's domestically produced chips, which offer a strong cost-performance balance can also support AI applications and training, and China's AI computing infrastructure is already sufficient to support development needs, the expert said.