Nvidia CEO Jensen Huang downplayed U.S. concerns about the use of the company's chips in China's military on the eve of another trip to the country.
He said the PRC military will not use U.S.-made technology because "they simply can't rely on it."
"They can restrict access at any time, not to mention that China has enough computing power as it is. They don't need Nvidia chips, and they certainly don't need U.S. technology stacks to develop their military," Huang noted.
The U.S. has been imposing restrictions on semiconductor makers for several years, barring them from selling the most advanced AI processors to China.
The latest barriers were introduced in April, when Nvidia was forced to obtain a license to export H20 chips. In response, the company began developing an AI chipset for the Chinese market at a much lower price, according to media reports.
In the first quarter, Huang's company incurred expenses of $4.5 billion due to excess H20 inventory and missed out on $2.5 billion in potential additional sales. Despite effectively exiting the Chinese market, the firm became the first in history to reach a $4 trillion market capitalization.
The head of Nvidia once again criticized the policy, emphasizing that export controls undermine the very goal of maintaining U.S. leadership in technology.
"We want the U.S. technology stack to become the global standard. To achieve that, we need to collaborate with all the AI developers in the world. Half of them are in China," he said.
Huang's interview came days before his upcoming second trip to the PRC this year. On July 10, he met with President Donald Trump at the White House. In parallel, U.S. lawmakers warned the top executive against meeting with companies linked to China's military or intelligence agencies, as well as organizations on the restricted export list.
DeepSeek Helps China's Military
AI startup DeepSeek is helping China's military and intelligence operations, reported Reuters, citing a senior U.S. official.
"We understand that DeepSeek has willingly provided and will likely continue to provide support to China's military and intelligence operations. These efforts go beyond open access to the company's artificial intelligence models," a State Department source said.
According to the agency, the firm was trying to use shell companies in Southeast Asia to gain access to high-tech and restricted semiconductors.
"It is trying to gain access to data centers in the region to remotely access U.S. chips," the source said.
There is growing confidence in Washington that the capabilities of the fast-growing Chinese startup are exaggerated and rely heavily on U.S. technology.
"We do not support parties that have violated U.S. export controls or are on U.S. entity lists. With the current export controls, we have effectively withdrawn from the Chinese data center market, which is now only served by competitors like Huawei," Nvidia commented.
Under Chinese law, companies operating in the country are required to provide the government with data upon request. Earlier, U.S. authorities said DeepSeek was transferring personal information of U.S. users to China through "internal infrastructure" linked to telecommunications provider China Mobile.
The startup is also mentioned more than 150 times in procurement records for the Chinese People's Liberation Army (PLA) and other organizations associated with the defense industrial base, Reuters writes.
Along with this, the firm uses U.S. export control workarounds to obtain advanced chips. It has access to "large volumes" of H100 processors, which have been under restrictions since 2022.
AI as the Backbone of China's Military
China considers artificial intelligence a key factor in future conflicts and aims to transition to the concept of "intelligentized" warfare. Major directions include:
Autonomous weapons and unmanned systems: Priority is given to developing independent combat platforms, including "drone swarm" technologies for coordinated mass attacks and lethal autonomous weapons.
Intelligence, surveillance, and targeting: AI is used to automatically process vast amounts of intelligence and surveillance data. Machine learning algorithms recognize targets in images and quickly identify threats.
Cyber operations and information warfare: Algorithms help defend domestic networks and attack enemy systems, from filtering network traffic to creating countermeasures.
Command and communications systems: AI is being integrated into command, control, communications, and intelligence to support decision-making.
In China, military AI is being developed through close cooperation between the government and the private sector, with personal oversight from the country's leadership. Key players include:
Norinco: The largest state-owned defense conglomerate and manufacturer of arms and military equipment. Norinco invests in robotics and autonomous platforms, such as the Intelligent Precision Strike System, which automatically coordinates groups of strike drones, simulates the battlefield, tracks targets, and plans strikes with minimal human input.
China Electronics Technology Group Corporation (CETC): A leading state-owned electronics corporation responsible for radars, communication systems, and electronics for the PLA. CETC is active in military AI technologies ranging from electronic warfare to unmanned systems.
Baidu: One of the largest private tech giants, actively involved in AI programs, focusing on autonomous driving, big data, and cloud AI technologies. The company collaborates with the defense sector through joint projects (e.g., a lab with CETC) and makes its research available for military applications under the policy of merging civilian and military technologies.
SenseTime: A large private company and leader in computer vision and AI-assisted image analysis, especially in facial recognition systems and video analytics. Its technologies are widely used in public security systems and are believed to be applicable for military purposes, from surveillance to intelligence analysis.
iFLYTEK: A private company specializing in speech recognition and language AI technologies. It is one of the "national champions." The firm's products are used by the PLA for automated listening to radio conversations and interception of communications as part of intelligence tasks.
Funding
Data on funding for military AI programs in China is partially classified, but available estimates suggest that the scale of investment is significant.
A study by the PLA's Center for Security and Emerging Technologies on open contracts showed a minimum of about $1.6 billion per year to procure systems with AI elements. The real costs are likely higher because much of the investment is hidden in R&D and classified programs.
China and the U.S. are now effectively engaged in an arms race in artificial intelligence. The Chinese military is rapidly deploying AI in a wide range of applications—from unmanned platforms to data analysis—in an effort to catch up with or surpass the U.S. However, America still leads in a number of critical technologies and is taking steps to maintain its lead.
Both countries are investing heavily in military AI, recognizing that possession of these technologies will largely determine the balance of power and the nature of security in the 21st century.
