Jensen Huang Walks an AI Tightrope Between the U.S. and China

Nvidia CEO Jensen Huang is trying to keep both the U.S. and China happy. It is proving to be a tricky high-wire act.

The chip maker drew praise from President Trump for its $5 billion investment in rival Intel , which recently struck a deal to give a 10% stake to the U.S. government. Huang was beaming on a joint video call with Intel Chief Executive Lip-Bu Tan as he discussed a new partnership to make processors for data centers and personal computers.

Even as Nvidia earns applause in the U.S., obstacles for the world’s most valuable company are piling up . This week, China told companies not to buy a key Nvidia product and accused the chip designer of violating an antimonopoly law . Influenced by the government, Nvidia customers there have spurned the H20, an artificial-intelligence chip the company designed specifically for that market and that Trump approved for export last month.

Huang’s challenge is to remain in good standing in the U.S. while pursuing opportunities in China’s vast market. He is making the case that allowing Nvidia to sell its coveted AI chips with minimal restrictions is the best way for each country to advance its national interests.

The clock is ticking as Chinese companies like Huawei continue improving their chipmaking capabilities. On Thursday, Huawei unveiled a new generation of chips that could challenge Nvidia products in the country.

Administration officials are weighing whether to approve a more advanced product that runs on Nvidia’s Blackwell architecture for sales in China, but it is far from a done deal. Trump is under pressure from national-security hawks who don’t think the deal should be allowed, and he could throw a curveball into the agreement, as he did when he demanded a cut of H20 sales in return for approving the exports.

In Congress, some Republican lawmakers are pushing legislation that would effectively curb most chip exports if there was a potential U.S. buyer for them. They have also introduced a bill that would require trackers to be put into American chips to make sure they don’t fall into the wrong hands, legislation that prompted China to tell companies to stop using Nvidia chips.

»I don’t envy Nvidia’s position,« said Ryan Fedasiuk, a fellow at the American Enterprise Institute, a conservative think tank. »It’s proving untenable for the company to attempt to serve so many masters.«

Under their new deal, Intel won’t be making Nvidia’s cutting-edge products for training AI models, but the commitment was still viewed by many in Washington as a way to curry favor with Trump, whose administration seeks to build up domestic semiconductor manufacturing capacity. The agreement showed how deeply the administration has entwined itself with the industry, bringing together a company that has made the U.S. government its largest shareholder with one that has agreed to give the government 15% of its China chip sales revenue.

Huang said Thursday the two sides had been talking for nearly a year and that the administration wasn’t involved. He added, however, that Commerce Secretary Howard Lutnick was »excited« by the news when informed about it.

Nvidia is at the center of U.S.-China trade talks , making Friday’s call between Trump and Chinese leader Xi Jinping to complete an agreement to transfer ownership of video-sharing app TikTok to U.S. investors another potential pivot point for the company.

Some observers expect the TikTok deal and an agreement to export the more powerful Nvidia chip to be part of a broader agreement between the two countries. They view China’s recent crackdowns on Nvidia as posturing to get access to a Blackwell product with much greater capabilities.

Others feel differently. AI czar David Sacks and his allies have said China’s actions show they don’t need Nvidia chips as much and are improving their manufacturing capabilities more quickly than many industry analysts realize. They have argued that limiting chip exports only benefits Huawei and other Chinese players that can improve their capabilities domestically, then take them to other countries.

»If people are advocating the same policies that Huawei wants us to do, I probably have some questions about that,« Sriram Krishnan, senior White House policy adviser on AI, said at an Axios event Wednesday. He works closely with Sacks, who has aligned with Huang on the issue.

»They have enough chips,« Krishnan added about China. »I see this as a way of them doing an AI Belt and Road Initiative .«

Many industry analysts say China’s chip companies are still well behind Nvidia and its competitors.

People familiar with Beijing’s thinking say officials still view Huang, a Taiwan-born U.S. citizen, as a friend of China. But Beijing officials think Nvidia’s lead in AI chips is being wielded by the Trump administration to hurt and insult China. Lashing out at Nvidia—and at Huang, whom Trump has called a friend—is a way of hitting Trump.

Banning certain Nvidia chips is also a way for some officials in the nationalist camp to prod Chinese companies to catch up with Nvidia and build a domestic supply chain that won’t be vulnerable to U.S. threats.

Particularly galling to some Chinese officials was Trump’s August comment that the H20 was obsolete . He went on to say he would be open to approving sales of a Blackwell version with at least 30% less capability. The company has presented an early version of such a product, which it calls the B30, to U.S. officials, according to people familiar with the matter.

Some Republicans in Congress oppose the chip exports. Sen. Jim Banks of Indiana is leading an amendment to the National Defense Authorization Act that would require companies to satisfy all U.S. demand before exporting. Nvidia says it never deprives American customers and compares the policy to Biden-era export restrictions Trump dismantled.

The amendment and the bill focused on trackers, known as the Chip Security Act, highlight discontent over how quickly Nvidia has won over the president.

»It is mortgaging our future as a country to sell these chips to China,« Dario Amodei , CEO of AI model developer Anthropic and a proponent of export controls, said at the Axios event. »It could be the single most disastrous national security decision made in this term.«

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com , Raffaele Huang at raffaele.huang@wsj.com and Robbie Whelan at robbie.whelan@wsj.com