China loses its role as leader of semiconductor deregulation; dark clouds over Asian procurement network

[Beijing Current Affairs] The resignation of Jensen Huang, CEO of US semiconductor giant Nvidia, was widely reported in China. With this resignation, China has lost an influential figurehead who had been urging the Trump administration to ease export restrictions. This is a headwind for speeding up the development of artificial intelligence (AI). Hard-liners against China are expected to gain momentum in the U.S. administration and Congress, which could put a strain on the overseas procurement networks that the Chinese depend on.

A blow to the Trump administration: the man behind the AI boom leaves the company - NVIDIA CEO resigns

Huang has long advocated for continued sales to China, arguing that withdrawing from the Chinese market would accelerate the country's domestic production of semiconductors and "undermine America's technological superiority." However, suspicions have surfaced that Alice Huang, a Chinese businessman with whom he allegedly had an affair, was an agent of Chinese intelligence. Although the Chinese government denies the spying allegations, there were also reports that a Singaporean company in which he was an executive was suspected of smuggling Nvidia semiconductors.

Former CEO Huang's theory of deregulation is also facing increasing political criticism. The Communist Party's official People's Daily newspaper Global Times published an editorial even before he resigned, expressing concern that if the logic of labeling him as a Chinese spy spread, it would "become a burden on both the U.S. and China and the global supply chain." On the 13th, IT Times said that while there are business opportunities for domestically produced semiconductors, it analyzed that ``uncertainty is increasing in overseas procurement related to AI.''

The procurement routes that Chinese companies have expanded into Southeast Asia, where regulations on China are less applicable, are likely to be subject to increased scrutiny. Singaporean authorities continue to investigate the smuggling issue. The US Congress is paying close attention to the use of US semiconductors through data centers in third countries.

If procurement of advanced American products dwindles, it will be a tailwind for Chinese manufacturers, but switching to substitute products will be costly and time consuming. The resignation of the head of a US high-tech company is casting an unexpected shadow on China's AI strategy.