US Will Retain China Chip Restrictions Despite AI Policy Shift: Adviser

The United States is using export controls to block the Chinese communist regime from obtaining advanced semiconductor chips.

CEO Jensen Huang talks during the keynote address of Nvidia GTC, in San Jose, Calif., on March 18, 2025. Nic Coury/AP Photo

Senior White House policy adviser on artificial intelligence Sriram Krishnan said on May 21 that the United States will retain export controls on China, responding to Nvidia CEO Jensen Huang’s call to ease restrictions.

Huang had discussed U.S. AI policy at a tech conference in Taiwan on May 19, crediting President Donald Trump for recognizing that a new approach was needed.

The United States began using export controls to block the Chinese communist regime from obtaining advanced semiconductor chips during the Biden administration, but Huang said that “all in all, the export control was a failure.”

U.S. agencies, lawmakers, and experts have acknowledged that the Chinese regime continued to obtain access to restricted chips by circumventing controls with loopholes, middlemen, and smuggling.

This approach was carried into the Biden administration’s AI Diffusion rule, Huang said, which “in the first place, have been proven to be fundamentally flawed.”

The rule, which was rescinded by the Trump administration, put countries into three tiers with different levels of access to American AI technology. Huang and Trump administration officials have criticized it for limiting the diffusion of American tech.

“President Trump realizes it’s exactly the wrong goal,” Huang said.

The Trump administration has taken a different approach to AI diffusion, siding with tech executives in saying that the American AI stack should be promoted around the world to retain the nation’s competitive edge.

During a recent trip to the Middle East, Trump announced trillions in investment between the United States and the Gulf States for tech projects that include massive data centers to be built in both locations and new access to advanced AI chips for the Middle Eastern partners.

While the administration and tech executives agree on increasing access to American chips, with Trump even brokering deals with new customers and investors, as in the recent trip, they may not agree on rolling back export controls.

In April, the Trump administration said it would restrict sales of Nvidia’s H20 AI chip to China, from which Jensen told investors they would take a $5.5 billion hit, later revising that number to an estimated $15 billion in public comments.

During the Taiwan conference, Huang said that export controls have brought Nvidia’s market share in China from 95 percent down to 50 percent.

He called on the administration to ease restrictions on chip exports to China, saying the Chinese market was estimated to be $50 billion next year.

“Our competition in China is really intense,” Huang said. “They would love for us never to go back to China.”

Huang said China has 50 percent of the world’s AI developers and that “it’s important that when they develop on an architecture, they develop on Nvidia, or at least American technology.”

In an interview with Bloomberg Television on May 21, Krishnan said the export controls would stay in place.

“When it comes to inside China, I do think there is still bipartisan and broad concern about what can happen to these GPUs once they’re physically inside,” he said.

He added that he agreed with Huang that the limited diffusion approach had to change.

“When it comes to the rest of the world, we want American AI stack starting from the GPUs to the models to everything on top. On that, Jensen and I and us are in agreement.”

Krishnan also addressed concerns that the expanded diffusion approach would allow China easier access to American AI technology.

“These deals and these GPUs are predominantly going to be run by American hyperscalers, American cloud service providers, and American companies,“ he said, referring to the Middle East projects. ”Most of these GPUs are going to be run, hosted, controlled by American companies.”