The Journal: "The Nvidia CEO’s Quest to Sell Chips in China"

Podcast: The Journal.
Hosts: Jessica Mendoza, Ryan Knutson
Guests: Ling Ling Wei (Chief China Correspondent, WSJ)
Date: August 18, 2025

Episode Overview

This episode explores Nvidia CEO Jensen Huang’s complex efforts to maintain and expand Nvidia’s business in China amid escalating US-China trade tensions, new export controls, and shifting political landscapes. It highlights Huang's evolution from a traditional tech executive to an active diplomatic figure, navigating the difficult balance between global business interests and national security concerns.

Key Discussion Points and Insights

1. Background: Nvidia's Rise and Growing Importance in AI (00:24 – 01:35)

• Nvidia is now the world's most valuable company, thanks to its dominance in advanced AI chips.
• The company’s chips are foundational to large AI models, putting it at the heart of global technology competition.
• Quote:
  "Nvidia chips power some of the biggest AI models in the world... it's also found itself in the middle of a tense trade battle between the US and China." – Jessica Mendoza (00:48)

2. US Export Controls and Market Challenges in China (02:16 – 03:20)

• US government imposed strict rules, limiting Nvidia’s ability to sell its most advanced chips to China, citing national security.
• As a result, Nvidia’s market share in China dropped dramatically.
• Quote:
  "Nvidia's 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." – Jensen Huang (03:10)

3. Innovation Under Pressure: The H20 Chip (03:20 – 04:26)

• Nvidia developed the H20 (Edge 20) chip, a less powerful AI chip, designed to meet US export restrictions but still sellable in China.
• The chip isn’t suitable for the most advanced AI models, but is still useful for AI inference tasks.
• Quote:
  "They're not the most advanced chips... many engineers and experts say the chip is still good at inference." – Ling Ling Wei (03:26)

4. Political Maneuvering and Lobbying (04:26 – 05:53)

• When the Trump administration considered banning the H20, Jensen Huang personally lobbied both US and Chinese officials.
• He attended a $1 million-per-head dinner with President Trump at Mar-a-Lago to plead Nvidia’s case, arguing US restrictions would only accelerate China’s domestic chip development.
• Elon Musk countered Huang’s argument, emphasizing risks to US tech leadership from ongoing sales to China.
• Quote:
  "Selling the H20 chip in China wasn't really a threat to national security... cutting off China from US Tech would only accelerate China's own domestic chip development..." – Ling Ling Wei (05:08) "Musk presented a counterargum, which was... any chip... in the Chinese hands, could have threatened US Technology leadership." – Ling Ling Wei (05:53)

5. Trump’s Decision and Its Implications (06:47 – 08:10)

• Trump initially banned the H20 in China, but was personally fond of Huang and lauded him at public events, calling him a "winner".
• Ultimately, Trump reversed the ban but demanded a 15% cut of Nvidia’s China chip sales for the US government—a move raising legal and ethical questions.
• Memorable Moment:
  "Jensen, will you stand up? What a job. What a job you’ve done, man." – Donald Trump, quoted by Jessica Mendoza (07:23)
• Controversy:
  "So do you mean that national security is for sale now?" – Ling Ling Wei (08:31)
• Legal experts question whether the 15% fee is lawful under the Export Control Act, and whether such a deal constitutes extortion.

6. The China Side: Dealmaking and Diplomatic Tightrope (10:44 – 13:35)

• Huang took multiple trips to China, courting top officials and earning the nickname "Magic Tailor" for tailoring chips to US export rules.
• His public praise for China and critique of US policy charm Chinese officials but raise eyebrows in Washington.
• Chinese authorities paused an antitrust probe of Nvidia and approved a $35 billion software deal, but expect Huang to lobby against US legislation that could impose tracking features in future chips.
• Quote:
  "China has also increased pressure on the company. They want Huang to keep lobbying Washington for loosened export controls..." – Ling Ling Wei (13:18)

7. Beijing-Mandated Pressure and Mutual Suspicion (14:20 – 15:32)

• Chinese regulators are wary that Nvidia’s chips could include backdoors for US tracking.
• Nvidia denies any such vulnerabilities.
• Quote:
  "The Chinese are really worried that Nvidia's H20 chips could contain so-called backdoors..." – Ling Ling Wei (14:33)

8. Winners and Broader Implications (15:32 – 17:19)

• China gains leverage: The reversal of the H20 ban sets a precedent, making export restrictions negotiable for the first time.
• For Nvidia and Huang, the episode signals that leading a global tech company now requires diplomatic skills and the ability to navigate geopolitical conflict.
• Quote:
  "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." – Ling Ling Wei (16:18)

Notable Quotes & Memorable Moments

• On Market Shifts:
  "Nvidia's market share in China was about 95% four years ago. It's about 50% today because of the limitations..." — Jensen Huang (03:10)

• On US-China Complexities:
  "He's basically taking on this dual role as both the CEO... and a diplomat of sorts trying to navigate... the US and China." — Ling Ling Wei (01:53)

• On Political Favor:
  "Trump really likes Huang and thinks that he's one of those, quote, winners." — Ling Ling Wei (06:56)

• On Precedent-Setting Deal:
  "Export controls were not something that was negotiable. And now people say the old playbook is out of the window." — Ling Ling Wei (15:32)

• On the CEO's New Role:
  "Being the CEO... is also about being able to conduct high stakes diplomatic tasks." — Ling Ling Wei (16:18)

Timestamps for Key Segments

• Nvidia’s Market & Tech Context: 00:24 – 01:35
• Export Controls and the H20 Chip: 02:16 – 04:26
• Lobbying the US and China: 04:26 – 06:47
• Banning and Reversing H20 Sales: 06:47 – 08:10
• Controversial 15% Government Cut: 08:10 – 09:47
• Nvidia’s Diplomatic Tightrope: 10:44 – 13:35
• Beijing’s New Pressure & Security Concerns: 14:20 – 15:32
• Long-term Implications and Lessons: 15:32 – 17:19

Summary

Jensen Huang’s quest to sell Nvidia's chips in China illustrates the new reality for tech giants: business success increasingly demands diplomatic savvy, political connections, and a willingness to walk geopolitical tightropes. While Nvidia and China both emerge as winners in this round—gaining capital and leverage, respectively—the episode leaves open urgent questions about export law, national security, and the unprecedented power now wielded by private sector leaders on the global stage.