At risk of losing market share, Nvidia CEO reappears in China – 01/22/2024 – Market

Without warning, the co-founder and CEO of semiconductor giant Nvidia, Jensen Huang, was in Beijing, Shanghai and Shenzhen last week, cities where the company has subsidiaries. He would not have met with authorities, but sought to honor and encourage his teams, at company parties in anticipation of Chinese New Year.

News of the visit only spread over the weekend, when videos of him dancing on a stage were posted by employees on Chinese social media, such as Weibo. He was wearing a traditional floral print shirt and trying to follow in Yangko’s footstepsfolk dance from the north of the country.

It was Huang’s first time in China since the start of the pandemic, having previously visited almost every New Year’s Eve. He even planned a trip for the middle of last year, when he would meet with Tencent and ByteDance (TikTok), among other clients, but it was canceled at the last minute due to political pressure in the United States.

Nvidia is the main target today in the American effort to restrict Chinese access to advanced chips. The largest supplier of semiconductors for training artificial intelligence applications, the company, based in California, has been seeking to circumvent export limitations to China determined by the Department of Commerce since 2022.

The country accounts for a fifth of Nvidia’s revenue, according to Huang himself. “If we are deprived of the Chinese market, we have no contingency for that, there is no other China,” he said last year. “If they can’t buy it, they’ll make it themselves.”

The Secretary of Commerce, Gina Raimondo, publicly complains about the businessman, born in Taiwan and naturalized American. The times it imposed restrictions, Nvidia immediately adapted its products to technical limits to continue selling to China, leading to questions.

Almost two months ago, the company ended up giving in and going back. It was when Raimondo revealed at an event that Nvidia was forcing the American government into a game of “Whack-A-Mole”, of having to change the rules every time Huang adopted an alternative product. Also that the company does not produce any chips “within our borders”.

The problem was that, after the businessman negotiated directly with Washington about the chip to be offered, the new RTX 4090D model, a weakened version of the RTX 4090, was not of interest to Chinese customers. These turned to the AI ​​chip developed and manufactured, respectively, by the Chinese companies Huawei and SMIC.

Huang’s unexpected trip now would be to reaffirm his link with the Chinese market. One of the images circulated on social media shows the businessman holding a box of his own “castrated” chip, as it was called by the Beijing press.

The repercussion of the visit was wide, with columnist Hu Xijin, from the Global Times, in Beijing, welcoming him on his Weibo profile, but ironizing: “I want to say that, the faster the advancement of Huawei and SMIC , the more willing the international semiconductor bigwigs will come, because they don’t want to lose the huge market.”

He added that it is “a complex game, in which the more it opposes ‘decoupling’, the stronger China will be.”

Responding to Shanghai-based financier Yicai, the company said Huang had not met with anyone in the government, but it was unclear whether he had met with clients.

On Saturday, he was already in Taipei, also to socialize with his employees on the island. He was seen again at a traditional night market in the city, this time in Ningxia. But in the Taiwanese press the expectation was that he would meet during the week with executives from TSMC, the company that manufactures chips developed by Nvidia.