US to Pull Back on AI Chip Restrictions

Bloomberg

Watch US to Pull Back on AI Chip Restrictions - Bloomberg on Dailymotion

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00:00We've just come off discussing how maybe the equation of what is profitable in AI infrastructure

00:06here in the U.S. is changing. How much does the abandonment of AI diffusion rule help or hinder

00:12those sorts of maps? Well, the diffusion rules being mitigated by the Trump administration was

00:18an important step forward because, quite honestly, they didn't make any sense to limit the technology

00:24to go to a wide swath of countries that really, in many cases, were our friends, not foe.

00:31And so the question is, what comes next? And what are the rules that they will put in place

00:41to hold the strategic kind of lead that they perceive? What's interesting is, as you say,

00:49countries that were deemed allies, Israel, India, suddenly on a Tier 2 level, not as able to access

00:56as many sophisticated chips as they'd wanted to. That was the proposed AI diffusion rule.

01:00But now we come to this awkwardness where it's going to be sort of a case-by-case basis,

01:04country-by-country basis. Malaysia, where Oracle wants to be putting a huge data center, for example,

01:10when are we going to need clarity on that? And how do you start to see companies and countries

01:14navigate it? Yeah, I think it's going to be, they're going to use it almost as a bartering tool

01:19in these trade negotiations. And it is a strong bartering tool. I think, however,

01:23the administration has to be very careful that we have to look after our own strategic initiatives

01:28and own strategy for national security, but we cannot overreach. And in part, because there is

01:35a very viable competitor with Huawei. We want to pretend that NVIDIA is a monopoly. It is not.

01:42Huawei has shown an incredible prowess over the last two months, even. They've introduced these

01:48fantastic chips and fantastic racks that, in fact, do compete with NVIDIA. So if we push too far

01:56on this, there is an alternative for the Malaysias to move to a different vendor.

02:02So when that argument comes from Jensen Huang, that I actually want to not only access Malaysia and

02:07Indonesia and, well, most of Southeast Asia, but I also want to sell into China still,

02:12should he be able to?

02:14You know, I do think that we're looking at this in the wrong way, to be completely frank. You know,

02:22let's think about DeepSeek. DeepSeek's innovation actually is helping our models. And Facebook is

02:30adopting some of the innovation that came out of DeepSeek. So one thing we can't forget is that

02:34innovation begets innovation. And you cannot stop that kind of life cycle of innovation. And if we slow

02:41innovation in China, we're slowing innovation here as well. So, you know, what I think this should

02:47focus on is, in fact, IP theft. So focus on making sure that our IP across the board, not only for

02:55for for for GPUs, but any kind of equipment, whether it's robotics or medical equipment, that's not being

03:02stolen by by the Chinese. Right. Instead of kind of fighting over the widgets. So I think we like to think of

03:10this as, you know, are you friend or foe or are you and perhaps there's some place in the middle

03:16where we can't treat China as as this enemy of the people when they're really not. They too are

03:24innovating at a pace that is probably faster than we are. So when a CATL is looking to list in Hong Kong

03:32and U.S. residing investors aren't able to access that, how does that make you feel as a portfolio

03:37manager who wants to be able to thrive in innovation worldwide? Yeah, frustrating. But you know what is

03:42also frustrating? A CATL wanted to build a factory here, you know, a few years ago and was stopped by

03:48the Biden administration. They actually wanted to move manufacturing back to the U.S. and weren't

03:53able to. So that too is frustrating as an American to have, you know, that the initiatives of bringing

04:01manufacturing back of these technologies to the U.S. is being hindered, which hopefully will will stop with

04:07this administration. I think CATL, you know, us not being able to access it. You know, this too,

04:14this too will be overcome. And I think these are these are hurdles along the way that we'll have to

04:21work through with with the Chinese and the Trump administration. Uncle, you were very clear that you did

04:26not want the AI diffusion rule and you felt that it was just harming most people in this environment.

04:31What then as a portfolio manager you do in this current lack of clarity, the fact that it's going

04:36to be a case by case. Do you still think NVIDIA will compete, will be able to compete well, will be

04:40able to access markets? And you're from the optimistic side of things. Do you start to add on

04:45in this point? I think it only makes sense to allow for our technology giant NVIDIA, who, you know,

04:53quite honestly, is is the pride of our nation at this point. Right. They are driving forward the AI

04:59revolution. And so I do think that over time, over I think by September, we'll have very clear

05:08boundary conditions around where we can and what we can or cannot ship. And IP will be protected,

05:15do you think? And and I hope IP will be protected. And I think that's the most important thing here.

05:20IP should be protected on a go forward basis across all industries with a commitment from Chinese

05:26government to make sure that that is in fact the case because we can't have this industrial espionage

05:33occurring all over throughout many industries. So I feel very optimistic for the rest of the world

05:38and for China that we will sort through this because, you know, we are a globalized world and we can't

05:46pull back from that. We can bring manufacturing back here, which I wholeheartedly believe in,

05:50but in a controlled way.

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