Chamath Palihapitiya Critiques Nvidia’s Export Strategy Amid AI Chip Controversy

Chamath Palihapitiya, recognized as the “SPAC King,” has expressed serious concerns about Nvidia Corporation’s NVDA approach to U.S. export control regulations.

Recent Criticism from Palihapitiya

During a recent episode of the All-In Podcast, Palihapitiya accused Nvidia of attempting to circumvent U.S. export controls aimed at restricting China’s access to advanced AI chips. His remarks highlighted potential implications for U.S. national interests.

“How is it that Alibaba shows up with something incredible, and DeepSeek shows up with something better?” Palihapitiya questioned, suggesting that Nvidia may inadvertently be facilitating access to its technology for Chinese firms.

He pointed out that after the U.S. restricted sales of leading GPUs like the A100 and H100 to China, Nvidia rapidly introduced modified versions—the A800 and H800—which complied with export rules while still maintaining competitive performance levels.

See also: Netflix Launches OpenAI-Powered Search for Emotion-Based Content Discovery

Nvidia’s Strategies and Market Response

Nvidia has also developed the H20 chip specifically for the Chinese market to align with U.S. regulations, according to Palihapitiya. Despite regulatory compliance, he emphasized that this chip retains significant computing capabilities.

“You have a 2017 plan they’ve been executing against, which emphasizes their ambition to dominate this space. Nvidia is reportedly navigating around guidelines at every turn to deliver silicon to China,” he noted.

Echoing Palihapitiya’s views, David Sacks, appointed by the White House as the ‘AI and Crypto Czar’, raised similar concerns about the evasion of export controls. He referenced an incident involving Taiwan Semiconductor Manufacturing Co Ltd TSM, which incurred fines for bypassing export limitations.

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Nvidia did not immediately provide comments to Benzinga regarding these allegations.

Importance of the Discussion

Palihapitiya’s critique is connected to a larger discussion on U.S.-China relations and the management of AI technologies. Recently, the White House announced an indefinite export ban on Nvidia’s H20 chips to China, warning that this could result in a $5.5 billion loss in quarterly revenue for the firm, as noted in a recent filing.

Interestingly, Nvidia CEO Jensen Huang was in China last week, engaging in high-level meetings. Reports from February indicated that Chinese tech giants like Tencent Holdings TCEHY, Alibaba Group BABA, and ByteDance had significantly raised orders for Nvidia’s H20 AI chips in response to emerging competition from DeepSeek, whose cost-effective AI models have gained traction.

DeepSeek’s R1 model was reportedly developed for under $6 million and has been shown to outperform some leading U.S. AI models, including those from OpenAI.

Market Performance

Price Action: Nvidia shares have decreased by 26.67% year-to-date, while showing a 27.55% increase over the past twelve months, based on data from Benzinga Pro.

Benzinga Edge Stock Rankings currently assign Nokia a robust growth score of 94.80%. Click here to see how Nvidia compares against TSMC, Alibaba, Tencent, and other leading technology firms.

Photo Courtesy: Kathy Hutchins on Shutterstock.com

Further Reading

Disclaimer: This content was partially generated with AI tools and reviewed and published by Benzinga editors.