Sharing AI Knowledge with Geopolitical Rival

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00:00At the moment, we're seeing Chinese rivals gain on the back of this lack of NVIDIA competition

00:06right now. What do you make of it? Well, all I know is we're going to have

00:11to figure out there's a long race here and a short race here. And we have to secure not

00:16only our global leadership, but also our intellectual property. And that's really

00:21some of the underpinning of the discussions here of is there a 15 percent? Is there not

00:26a 15 percent? What does this mean from an export control? So a lot more to come on this. But

00:32obviously, China is amping up their part in the race trying to win the global war on who's going

00:39to dominate AI. What is the IP risk? Well, the IP risk. So even though we're talking about sending

00:46a modified chip over to China, in my opinion, based on my years of experience, it's like handing over

00:53the keys to your R&D lab and saying just be in the small QA lab, not the bigger lab and don't look

00:59around. You wouldn't hand the keys to your R&D lab to your competitor. And China is our global

01:05competitor here for this technology. So really what we're thinking about here is how could they

01:11get access to these chips and perhaps reverse engineer everything from performance to how things

01:17behave. Really, you just don't know what they're going to be able to do once they have their hands on

01:22all these chips. Teresa, let's say you're back as the White House chief information officer.

01:27What are you advising President Trump as to whether Jensen should have access to the Chinese market?

01:34Well, I think this is a tough one because the private sector does have the right, you know,

01:39companies do have the right to sell their goods and services all around the globe. We don't have a

01:45blockade on selling technology and other goods and services to China. So this is a very delicate

01:51balance here between a White House administration and a private sector organization. And so really

01:57what you have to do is look at the laws we already have on the books and then say, what kind of

02:02safeguards is this U.S.-based company going to follow based on the laws on the books? What types of

02:08inspection processes? What types of control processes? There is a playbook for doing this,

02:14even though this technology is new. And so we have to look at this playbook. The question is,

02:19is whether or not new rules and regulations are going to be codified. And I think that's the open

02:23question that NVIDIA is having to deal with. NVIDIA put in its 10Q that it could be exposed

02:31to potential legal implications because of this 15 percent issue. What would it face in terms of legal

02:40issues? Well, if we end up codifying some type of a new barrier to the market in China or enforcing one

02:52of the existing regulations in a way that hasn't been enforced before, then NVIDIA would have to make

02:56the decision of, am I now blockaded from actually selling to China or do I have a lot of burdens on me

03:03that maybe don't exist for other companies who are selling technology to China? Remember,

03:08you've got big tech who's in China, social media is in China. It's not just NVIDIA who is selling

03:13goods and services to China. And so they may decide, well, this is an undue burden placed on us.

03:19So they may decide to take on a lawsuit or they may find themselves answering to, for example,

03:26CFIUS. As you know, TikTok USA has had a lot of legal challenges and legal bills as it relates to

03:32how they operate and CFIUS interpretations of how they operate. So I think they're just kind of

03:38looking at past cases precedent and then also looking at the president's remarks as a potential

03:44future precedent and deciding that there could be a risk for a long protracted legal battle.

03:51Teresa, we heard from Jensen Wang there's a $50 billion opportunity in this year alone in China,

03:58but push out five years. Does that exist at the rate that the Chinese government are trying to

04:02push their own companies away from the US tech stack? Yeah, it may not exist in the future. That

04:09is a tough one. All I can tell you is from the front lines of working with companies who have done

04:16business with China, it is a very tricky proposition, especially as it relates to cutting edge technologies,

04:24whether it's sort of like clean energy, whether it's computer technology. And it's very difficult

04:30and challenging to really understand what the regulatory environment is going to be and the

04:34protection for your intellectual property. You know, kind of the big elephant that we're not discussing

04:39in having all of these conversations is we have a new, more detailed report from the FBI on Salt

04:45Typhoon. And the findings from that report are stunning. We're talking 80 countries were impacted,

04:51not just the United States, and the access to metadata, phone calls and other information.

04:57You know, this is one of those things and China denies that they had any part in this. But this

05:01is one of those things where we're seeing sort of this vacuum cleaner effect of China, basically

05:07vacuuming up intellectual property data information to use it for economic espionage.

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