White House’s AI and Crypto Chief Defends Nvidia’s China Chip Deal as Strategic Move to Undercut Huawei’s Rise

The White House AI and the Crypto Advisor David Sacks was in complete defense of the Biden administration’s decision to allow Nvidia to take up sales of his AI chinese fleas to China, arguing that this decision is a tactical stage to prevent the Chinese technological giant from Huawei from winning undeniable domination in the second economy in the world.

In an interview with Bloomberg on Tuesday, Sacks said that the government’s change in position “made a lot of sense” given Huawei’s capacities upwards in Huawei.

“There is a convincing argument here that you just don’t want to give Huawei the whole Chinese market when Nvidia is able to compete with a large branch with an obsolete and less competent chip,” he said.

The NVIDIA H20 flea – designed specifically to comply with previous American restrictions – has been interrupted its sales in April after the US government said licenses are necessary for such transactions. But in a blog post on July 14, Nvidia confirmed that the United States had now assured that licenses will be granted and that the company hopes to start soon.

The announcement follows a private meeting between the CEO of Nvidia, Jensen Huang and President Donald Trump last week, where Nvidia reaffirmed her support for the objectives of job creation, provision and AI. Commerce secretary, Howard Lunick, said later that the green light to resume H20 sales was part of a wider negotiation involving rare land agreements with China. Lutnick stressed that the administration wanted Chinese developers to remain linked to American technology by giving them “the fourth best” chip, not the most advanced models such as H100 or H200.

“We want to continue to ensure that the Chinese use the American technological battery because they still count,” said Libnick. “You want to sell the Chinese enough for their developers to become dependent on the American technological battery.”

But the CEO of Nvidia, Jensen Huang, did not hide his frustration with the export borders. He has repeatedly warned that Washington’s repression is self -deferenture and risks turning against American companies and on long -term technological leadership in America.

Explaining the Financial Times in March, Huang said that restrictions harm Nvidia, cost him a large market share and undermine the supremacy of American chips. Added that the “presence in Huawei AI increases each year” and that Nvidia “cannot assume that they will not be a factor”.

He also described the American strategy of “poorly executed”, noting that the restriction of access to fleas encouraged Beijing for the independence of semiconductors. Huang added that Huawei, in particular, had become “the most formidable technological business” in China.

“Their presence in AI increases each year, and we cannot assume that they will not be a factor. They have conquered all the markets they have engaged,” said Huang.

Despite radical American sanctions intended to tighten China access to advanced semiconductors, Huawei has become more resilient than expected. With massive support for the Chinese government – including financing, partnerships and intellectual property protections – the technology giant has challenged Western expectations and built cutting -edge chips that feed everything, smartphones with AI data centers.

In 2023, Huawei shocked the industry by revealing a chip of 7 nanometers inside his MATE 60 Pro smartphone – a feat that was once impossible under American restrictions. This decision drew global attention and exposed gaps in the effectiveness of American export bans.

Since then, US intelligence managers have warned that the ambitions of Chinese semiconductors are gaining ground faster than expected, partly because companies like Huawei use sanctions as a rallying cry for technological autonomy.

“China is perhaps one and a half to two years behind us in flea design,” admitted Sacks, “but Huawei moves quickly to make up for it. Before they make up for it completely, I think you will see them export their fleas to the world market.”

Nvidia’s ability to sell in China is not only quarterly benefits. China represents one of the largest markets for AI fleas in the world, with data centers, cloud computing components, surveillance and military sectors all demanding high power GPUs. American companies dominate this segment, but with restrictions in place, they are now likely to be in a hurry.

Without access to Chinese buyers, American flea manufacturers are at risk of losing against national rivals like Huawei, SMIC and new players supported by semiconductor funds of several billion dollars in Beijing.

Dan Ives de Wedbush Securities echoes this point of view in a note according to the H20 decision. “Nvidia taking up sales of H20 fleas in China is a gamechanger in our opinion. Trump knows that there is a chip in the world fueling the AI revolution, and it’s Nvidia,” wrote Ives. “Giving the green light to Jensen / Nvidia is part of the negotiations with China. Nvidia obtains $ 30 billion + annual biz. ”

After the news, Nvidia’s shares jumped more than 5% on Tuesday, ending a record of $ 170.70. Investors have interpreted the decision as a strategic victory for Nvidia, ensuring that it can recover lost ground in the AI sector rapidly growing in China while remaining within the limits of national security.

This decision reflects Washington’s delicate balance – protecting US innovation and interests without triggering a large -scale decoupling that could alienate key markets and accelerate the technological independence of China.

“We do not sell our latest large china chips, but we can deprive Huawei to have essentially this giant market share in China that they can then use to evolve and compete with us on a global scale,” Sacks told Ludlow.