The Journal. - The Nvidia CEO’s Quest to Sell Chips in China

Episode Date: August 18, 2025

After months of quiet behind the scenes’ lobbying in both Washington and Beijing, Nvidia CEO Jensen Huang has secured a deal to protect tens of billions of dollars in future sales from the heated U.S.-China trade rivalry. WSJ’s Lingling Wei profiles the CEO’s transformation from co-founder to corporate lobbyist. Jessica Mendoza hosts. Further Listening:- How Intel’s CEO Became a Political Liability- The U.S. Wants American-Made Chips. Can Intel Deliver? Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Our colleague Lingling Wei is the chief China correspondent for the Wall Street Journal. And lately, she's had to learn a lot about tech, specifically semiconductor chips. I'm getting a crash course over chips. Seriously, I'm really fascinated myself. In particular, Lingling has been reporting on one tech CEO, Jensen Huang. Jensen Huang is the CEO of Invidia, a California-based chip designer. Invidia is the most valuable company in the whole world right now with the market capitalization of over $4 trillion.

NVIDIA chips power some of the biggest AI models in the world. And as the company has become more important in the race for artificial intelligence, it's also found itself in the middle of a tense trade battle between the U.S. and China. Lingling says that's meant a new role for the tech company's CEO. Huang, for many years, he had largely avoided the rough and tumble world of politics in Washington. He mostly delegated the messy task of lobbying to some of his key underlings. But that started to change after Trump won the election late last year. Huang has been busy lobbying both Washington and Beijing.

Now, he's looking at a massive deal for his company, worth billions of dollars. The deal could reshape how companies navigate business with the U.S. government, and it's transformed the NVIDIA CEO into a major player in geopolitics. Nowadays, he's basically taking on this dual role as both the CEO of the most valuable, one of the most powerful tech companies in the whole world, and a diplomat of sorts, trying to navigate the very complex relationship between the U.S. and China. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday. August 18th. Coming up on the show, Jensen Huang is walking a fine line

between the U.S. and China, and he stands to make billions. What did your ancestors really do all day? Beyond names, what were their lives like? With ancestries, global historical records, you can discover incredible stories about how your ancestors lived and worked. And for a limited time, you can explore select occupation records for free. Imagine finding your great-grandfather's RCMP records or discovering your ancestors' name

in the UK and Ireland Nursing Register. Don't miss out. Free access ends August 24th. Visit ancestry.ca for more details. Terms apply. world embraces AI, NVIDIA's business has soared. But the company has faced setbacks in one of its key markets, China. That's because the U.S. has restricted sales of advanced computer chips to China, citing national security concerns. Jensen Huang talked about this recently in a CNBC interview. Invidious market share in China was about 95% four years ago. It's about 50% today because of the limitations on the products that we sell. The restrictions forced NVIDIA to get creative and design a chip that could be sold in China.

The Edge 20 chip was created by Invidia as kind of a less powerful chip, specifically for the Chinese market, to comply with existing U.S. expert controls. They're not the most advanced chips Nvidia has. The edge 20 chips cannot be used for, for example, creating large AI models. models such as the ones powering chat GBT and other chatbots. However, many engineers and experts say the chip is still good at inference. Basically, that's the kind of ability of AI programs to tap their training to answer user questions. And so the idea was Jensen Huang and NVIDIA built this chip specifically to comply with U.S. regulations

so that they could still access the Chinese market. Was the White House satisfied with the H20 as a product? Initially, they were not. Back in April, the Trump administration basically sent out signals they were going to ban sales of H20 chips to China based on national security concerns. So that set off a frenetic lobbying effort attempt by Jensen Huang.

Lingling and other journal reporters spoke to current and former officials in both the U.S. and China, and people familiar with Huang and his lobbying efforts. They learned that Huang attended a dinner with the president at Mar-a-Lago, which cost a million dollars per head.

And at that dinner, Huang made his case. He told the president that selling the ex-20 trip in China wasn't really a threat to national security, And he also said basically that cutting off China from U.S. tech would only accelerate China's own domestic chip development, ultimately harming American leadership in the long run. That's his argument, the gist of his argument.

To sweeten the deal, Huang offered Trump a big incentive, a $500 billion investment in AI infrastructure in the United States. Trump welcomed the investment. But he still didn't budge on the H-20 chip ban. That's in part because there was another tech CEO making a counterpoint. Guess who intervened? It was Elon Musk, who at the time was still close to Trump. And Musk presented a counter-argument, which was, you know, any chip, even though not as powerful as the most advanced chip in the Chinese hands

could have threatened U.S. technology leadership. If you keep selling American technology to China, that runs the risk of China potentially using the know-how and products against America someday. And that view combined with opposition from national security-minded officials, persuaded Trump to impose the restriction Jensen Huang had tried to stop. Okay, so Trump did wind up banning the sale of the H-20 chip. But were there any hints at all that Trump was, like, warming to Huang's charm offensive?

Absolutely. Jensen Huang really has been quite successful in terms of building a relationship with the president. Based on reporting, Trump really likes Huang and thinks that he's one of those, quote, winners. In July, Huang, along with other texts, CEOs attended an AI summit in D.C. Trump delivered a keynote address. And throughout his speech, he called out to Huang in the audience. Jensen, we used to end up. What a job. What a job you've done. Man. Trump praised Huang several times. He started as very small and now he's really become very amazing. So he really has come to view Jensen as one of those winners and

somebody he would like to consult with on policy matters and other issues. Eventually, Huang got his big win. Trump reversed the ban on sales of the H-20 chip in China. It was a huge break for NVIDIA. Its stock immediately ticked up, helping the company crack a $4 trillion valuation. But there was still one hitch. Trump had one more demand. He wanted a cut of the sales.

NVIDIA and another chip company that was also given the go-ahead to sell in China will have to pay a 15% cut of their chip sales in China to the U.S. government. How unusual is this proposal coming from the Trump administration? So the 15% cut sparks two major concerns. First, is it even legal? Because there is an export control act back in 2018. clearly states no fee may be charged in connection with any application for a license, meaning an export license.

And the second issue here is potentially more alarmingly, many experts have warned that this could function as a form of extortion. So do you mean that national security is for sale now? Does that suggest sensitive technology could be sold to a rival like China, provided the company makes a large enough payment to the U.S. government? So it's being hugely controversial and definitely raising a bunch of legal and security questions, and we're going to see if this decision and this deal would be challenged in court. Do we have any idea what the revenue from the 15% cut might be going towards?

No idea. Okay. No idea. Simple answer. Neither the Trump administration nor Envidia have released details of the agreement. People close to them say many of the details in the financial structure still need to be worked out. A White House spokesman said that the president regularly talks to business leaders like Huang. He added, quote, the only special interest guiding the president's decision making is the best interest of the American people. It's taken months of negotiations with the White House.

for Huang to score this agreement. But winning over Trump was only half the battle. We'll be right back. U.S. trade policy hasn't been the only roadblock for NVIDIA's business in China. NVIDIA has also had to convince officials in Beijing to clear a pass. for its chips. Jensen this year has made at least three trips to China, and he has met with very senior Chinese officials,

including leader Xi Jinping's right-hand man on the economy, vice-premier Hele-Fung. Envidia is quite popular in China, and Huang even has a nickname there, the Magic Taylor. That's because of his unique skill at designing chips that managed to thread the needle of U.S. regulations, like the H-20 chips. When Trump agreed to reverse the ban on selling those chips to China, Huang was already in Beijing.

Jensen himself announced that the U.S. government had decided to lift the ban on H-20 sales to China. And he did press briefings with Chinese and Western reporters. And during those briefings, he really praised China's technological achievement to the skies. You're rich with science and math and computer science and very unique. So the ecosystem is quite dynamic, it's moving very fast and I'm just very happy to be here. And at the same time sounded very critical of the U.S. policy. So that wasn't received very well by many people in Washington, but the Chinese love It sounds like Huang, Jensen Huang, has to walk a really fine line to make sure that he doesn't upset either China or the U.S. too much, but also is able to sort of cater to each side so that he's telling them what they want to hear.

Yes. It's a super tight rope and not only tight rope, but shifting sand too, right? Because policies keep changing in both the U.S. and China. You really don't know when things would just turn on a dime. So, you know, it's definitely a very high-stakes effort for Huang. Huang's efforts with the Chinese seem to be paying off. The Chinese government has paused an antitrust probe that had opened into NVIDIA late last year. Beijing also approved a $35 billion deal involving U.S. chip software makers that had been held up for the last year. But once again, there's a hitch.

Lingling says these moves by Beijing come with strings attached. Knowing the importance of the Chinese market to NVIDIA, China has also increased pressure on the company. They want Huang to keep lobbying Washington for loosened export controls, to keep lobbying Congress. What else do the Chinese want? I mean, Trump already said he'll ease up on the H-20 chip sales. There is some proposed legislation in Washington to require tracking capabilities for advanced trips sold abroad. China doesn't like that idea. And China knows that Juan and others in the tech industry in the United States have lobbied against the bill.

But they still do believe that the bill has a chance of passing. So they're amping up the pressure on Jensen Huang and other tech companies in the United States and hoping that those lobbying efforts could help kill the bill. All this talk in Congress about using chips to track what China is up to has started to raise suspicions in Beijing. Last month, Chinese regulators called Huang to find out whether the H20 chips could be compromised. The Chinese are really worried that invidious H20. trips could contain so-called backdoors, which basically, in their views, could allow for

checking, locating, and even remotely disabling the trips. And the fear is that, you know, reliance on U.S. made trips with such vulnerabilities could compromise the security of China's data and critical infrastructure. An NVIDIA spokesperson said the company does not have back doors in its chips that would give anyone a remote way to access or control them, calling cybersecurity critically important. NVIDIA, Trump, and China all seem satisfied with the deal to lift the ban on H20 sales. China gets access to NVIDIA's chips. NVIDIA gets to do business with China, and the Trump administration gets a cut of the sales.

But in the grand scheme of things, Lingling says there's a case to be made that China is the biggest winner here. This H-20 ban reversal really is a watershed moment in U.S. policy. Because up until the H-20 ban reversal, export controls were not something that was negotiable. And now people say the old playbook is out of the window. The Chinese now get to negotiate with the U.S. over expert controls. And that gives China a powerful lever in future negotiations with the U.S. government. And what about Jensen Huang?

You know, he's been at the center of all of this. What does this moment mean for him? This whole saga, it just shows how treasurerous it has become for corporate leaders like Huang himself, you know, to navigate such a complex landscape where economic interests in the cruiseries. Chinese market come into conflict with U.S. national security concerns. Being the CEO of a major American tech company is no longer just about focusing on innovation and shareholder value. It's also about being able to conduct high-stakes diplomatic tasks. For now, Huang is winning, but can he keep winning?

especially given the heightened scrutiny over tech sales to China. That's really the big question. That's all for today, Monday, August 18th. The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode by Rafael Huang, I'm Ruth Ram Kumar, and Robbie Wheelan. Thanks for listening. See you tomorrow.