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Eastern and streaming on CNBC plus. >> Shares of Nvidia, rising today, as the chip maker says it
expects to be able to sell in China again. But can it pull ahead of rivals in that country. Our
Deirdre Bosa is watching that in today's tech check. Morning D.
>> Hey good morning Carl. So Wall Street is busy calculating the revenue rebound. But here is the
bigger picture. This isn't just about selling chips. Again it's about keeping China inside Nvidia's
software ecosystem.
Now the H20 chip. It is actually slower than many of the alternatives on the market, including
Huawei's Ascend. But China's AI developers, they're still building on Nvidia's Cuda. That is the
software layer that tells the chips what to do and how to train the AI models. So it's like an
operating system for AI development that everyone from Alibaba to Deep Sea can build on.
And that is the real lock in. Had Washington fully blocked Nvidia from selling even downgraded chips
like the H20, it would not have stopped Chinese AI. It would have just accelerated Huawei's push to
build a homegrown alternative, something David Sax was talking about earlier on in the hour. Now,
Huawei is already reportedly redesigning its next AI chip to make it easier for developers to switch
off Cuda. The goal is to win over Chinese companies that still rely on Nvidia software, even when
they can't easily buy the software, so a full ban could have handed Huawei the opening that it
needed a captive market with no choice but to build around its own chips and its own ecosystem.
Necessity is the mother of invention, that phrase that our audience has heard often this year when
it comes to the race between the US and China and AI. So now with H20 licenses, granted, Nvidia gets
to keep selling just enough to stay relevant. Keep Cuda locked in as the default and argument that
Jensen Huang certainly leaned on in his discussions with President Trump. And this tracks a bigger
shift, as well as a strategic shift that we've seen emerging from this administration. And that is a
move away from hard bans toward a policy of controlled diffusion.
The idea that if you block AI access entirely, it forces adversaries like Huawei to build
independently. So instead, the goal is to keep American technology and American standards entrenched
globally, even rival markets. And again, that is another thing that David Saxe told you guys earlier
that is key to winning the AI race. Jensen Huang hit on those points. That has been a successful
playbook so far in this administration.
>> Well, no question Wall Street is happy about it. I do wonder though, what if there are security
implica.