Why it matters: Amid increasing China-US tensions and more AI-chip sanctions being placed on the Asian nation, Nvidia CEO Jensen Huang has just visited the country for the first time in over four years to celebrate the Chinese New Year with employees.
Taiwan-born Huang hasn’t visited China since December 2019, before the outbreak of the pandemic. The Nvidia boss returned this month with some visits to the company’s offices in Shenzhen, Shanghai, and Beijing, according to local reports.
Huang has never been afraid to take part in activities with staff. He certainly seemed to be having a good time in China. During one meeting, Huang dropped his famous leather jacket and donned a traditional floral-patterned vest as he took part in a program of Yangge, a type of folk dance from northern China, on stage.
While Nvidia declined to say if Huang’s visit involved more than celebrating with employees, some reports say he met with a few of the company’s top clients in China. The meetings are likely related to Nvidia’s cut-down AI chips designed to comply with US restrictions, which Chinese firms are said to be shunning due to their reduced performance. Whether Huang can convince them that Nvidia’s AI products remain the best option remains to be seen.
Team Green is also facing increased competition in the region from Huawei. Huang previously warned that the restrictions on US exports to China will likely increase the rate at which local firms develop alternative rival chips. Nvidia says it expects its China sales, which make up 20-25% of its massive data center revenue, to decrease significantly in the fourth quarter due to the updated rules. When asked if Nvidia should keep doing business with China, Huang said: “We’re a company that was built for business and so we try to do business with everybody we can. On the other hand, our national security matters and our national competitiveness matters.”
Huang is believed to have planned a visit to Shanghai in June last year that would have involved meeting execs from Tencent Holdings, TikTok owner ByteDance, and Xiaomi. He ultimately canceled the trip, which was supposed to take place following his visit to Taiwan.
