Nvidia's Jensen Huang on an AI Bubble, Trump, and the Arms Race with China

This is for certain. Everybody's jobs will change as a result of AI. Some jobs will disappear. Obviously, every single industrial revolution, some jobs are just gone and but a whole bunch of new jobs are created. Everybody will have to use AI because if you don't use AI, you're going to lose your job to somebody who does. Time has named the architects of AI as the 2025 person of the year. One of those architects is Jensen Huang, the CEO of Nvidia, which is now the world's most valuable

company. Nvidia has a near monopoly on the supply of GPUs. The advanced computer chips powering the AI boom that's transforming the planet. The industry's rapid growth has tech leaders proclaiming a new era of abundance while skeptics warn of a looming financial bubble. In November, I went to speak with Wang at Nvidia's Bay Area headquarters. Google CEO Sundar Pachai said this week >> uh that there were elements of irrationality in the stock market >> around AI right now.

company. Nvidia has a near monopoly on the supply of GPUs. The advanced computer chips powering the AI boom that's transforming the planet. The industry's rapid growth has tech leaders proclaiming a new era of abundance while skeptics warn of a looming financial bubble. In November, I went to speak with Wang at Nvidia's Bay Area headquarters. Google CEO Sundar Pachai said this week >> uh that there were elements of irrationality in the stock market >> around AI right now.

>> Do you agree with him? there's always some irrationality somewhere in the stock market. I think that that's a fair thing to say. Um I would say though the part that most people miss is that underneath the foundation of chat bots and agentic AI is a transformation of computing from general purpose to accelerated computing. When do you then then gauge um uh the the investments incremental on top of that relative to the opportunity of generative AI or agentic AI AGI on top of that then

you'll come to the conclusion in fact it's very modest it's still significant but it's modest in in in relative to the overall computing market. >> So you're uh somewhere between four and five trillion dollar company right now. a lot of that cash flow that you're bringing in as revenue >> uh you're investing in other companies in the space. Some people >> in the the world of analysts and the stock market are saying this creates a degree of circularity. Uh there's vendor

financing here, it could create extra systemic risk uh if for example companies like OpenAI which is not profitable fails to meet uh the commitments that it's making to buy data centers mostly full of your chips. Are you concerned that there is a a growing structural risk related to all of those things? >> Not because of this reason. Um >> for any other reason. >> Well, if there are other reasons that we can talk about, but not for this, you know, not for this particular reason.

Let me tell you why. Every single transaction we do, every single purchase order that we take, we still go back to first principles and we ask ourselves, do you really have the demand for it? Because if you don't have the demand for it, somebody else has demand for it. The reason why we invest is several reasons. One is to expand our ecosystem. If you look at the investments that that we will likely make and have made up to now and you compare it to the revenues that

we have that we're generating, it's in the single low single digits. And so that kind of tells you how could low single digits create circularity. And then very importantly, this is the last reason. These are consequential companies, most important companies of our time. And we have the opportunity to be a have a front seat, front row seat partnership with them. We kind of also have, if you will, inside information about how successful they're doing. And so the opportunity to invest in them,

it's going to turn out to be a great investment. >> I'd love to move on to talking about the year that you've had in the world of politics and policy. M >> um the year begins with Trump entering the Oval Office. >> Uh I understand that your first meeting with him ever was that month in January. >> Mhm. >> Um and since then >> you've traveled the world with him, he's referred to you as a close friend and a great leader. >> And I'm curious, having spent so much time with him up close this year,

>> what's something that you've learned about his approach to AI and the way that he does business? Um, let's see. I I guess maybe I'll say some things that that um isn't evident um watching or or reading about President Trump on on TV or news. Uh first of all, he's an extraordinarily good listener. U he's he's almost I think everything I've ever said to him, he's remembered. Uh he is an incredibly hard worker. his work ethic. He starts as early as anybody else and oftentimes

uh we'll be talking about things late in the night and I'm kind of ready for bed and he's he would have gone for several more hours and so so I I've never met anybody with such incredible work ethic and so he's you know he it just came from everything that he's done he's worked hard his life his whole life he works seven days a week as far as I can tell um there is no you after work spend time with doing something else. He's just working the whole time. And so these two qualities

are are really impressive and I wouldn't I wouldn't have have um guessed those two two qualities, but he's excellent listener. He's incredible work ethic and he's super smart. >> In the time that you spent in and around the Trump administration and traveling the world this year, is there an important moment that you experienced that the world doesn't know about yet, but that you think it should? The world is um unaware of how deeply dependent United States and China are to each other.

uh the the the ideas that that uh floated around about United States decoupling from China I think is is is is flawed and our dependency on each other is quite significant and it's deeper than people think and every single time we press it we realize what else we're dependent on each other on that this will be the most consequential relationship in the next century if this is so um I I think that we we really ought to recognize that managing the relationship and not causing conflict is

the most important thing we could do. And so, uh, negotiations, communications uh compromise um and just the continuous process of doing that is essential. And I think the current administration has demonstrated incredible wisdom in engaging whether it's he hexath in uh uh with uh the military uh whether it's uh bessent and treasury uh President Trump himself uh ambassador Greer all of them representing us engaging deeply in conversations there uh deeply wise deeply wise and I think it'll

demonstrate that a century from that impactful change versus isolation and and avoidance and uh I think that's important. I think the second thing that that I would say that the world didn't realize is how deeply dependent we are in the AI industry on the brilliant students and the brilliant scientists of China. 50% of the world's AI researchers are from China. Their companies in China wants China to win. I think that's terrific. And I think the Chinese want

China to win. I think that's terrific. We want America to win and we can have a healthy competition while we compete, compete fairly and collaborate at the same time. But I think the taking it emotionally too far from that um results in in uh consequences and relationships that are that are just harder to manage. you've been still unable to ship uh at the beginning of the administration your H20 chip to China and had argued uh successfully ultimately to the Trump

administration for them to remove that export control. However, shortly after that uh commerce secretary Howard Lutnik said that the goal of American chip policy in that regard was to get China addicted to US chips. Um and that after that China turned around and said actually no we don't we don't want the H20 and since then you've uh publicly declared that you have no uh China revenue anymore. What was your response to to Lot's comments there? Well, you know um

it's unfortunate. Uh I I would say I would say um so first of all it's really important to understand what AI is. AI is not just a model. What AI what AI is is a full stack of reinvention of every single layer of the technology stack. AI is about energy. That's the reason why we're talking about energy all the time. When President Trump came into office and he was pro- energy growth. If it wasn't because of his posture on energy growth, the United States would have

it's unfortunate. Uh I I would say I would say um so first of all it's really important to understand what AI is. AI is not just a model. What AI what AI is is a full stack of reinvention of every single layer of the technology stack. AI is about energy. That's the reason why we're talking about energy all the time. When President Trump came into office and he was pro- energy growth. If it wasn't because of his posture on energy growth, the United States would have

been in a very bad way. We would have had no energy, no incremental energy necessary to grow this incredibly important industry. So his growth posture, his grow energy growth policy is incredibly helpful. But we have to win every other layer as well. The next layer is chips. The layer after that is infrastructure, cloud services. the liar after that um large language models or AI models and of course very importantly AI applications. The United States has if we if we hope to take advantage of

this next industrial revolution and this will be the largest industrial revolution of all of the industrial revolutions. And so every layer of that stack we must be determined to win. But if we allow all of the layers to only be as successful as the least successful layer, then United States will fall behind. No doubt. Our belief and and what I've explained is that in the layer of chips, the single most important thing is to make sure that every single model in the world runs on

American techstack and that the American tech stack is everywhere in the world. So that you know American text stack becomes if you will the global standard. There's a belief that somehow if we provided American chips to uh foreign foreign countries and specifically China that the Chinese military would be building their military and building um airplanes and aircraft carriers using American chips. Well, first of all, they have plenty of their own chips and their companies are

formidable. The idea that China does not have technology industry we now know is lunacy and we all the idea that China is not able to manufacture would suggest somebody is had their head deeply in the sand. The ability for us to engage the China market, compete freely there, earn our business, earn our business is great for um great for America. It's great for the American people. It allows us to uh generate revenues for the United States. And as you know, the country that is

formidable. The idea that China does not have technology industry we now know is lunacy and we all the idea that China is not able to manufacture would suggest somebody is had their head deeply in the sand. The ability for us to engage the China market, compete freely there, earn our business, earn our business is great for um great for America. It's great for the American people. It allows us to uh generate revenues for the United States. And as you know, the country that is

most secure, has the mightiest military is because it's also the wealthiest country. And so we want America to be the wealthiest country so that we can fund the mightiest military. And I I think that that is our way of contributing to national security. >> But this is a tight ripe that you're walking right because you saying this precisely what China wants is to have its own semiconductor. >> I know it >> industry. I know it. >> So in a way it wasn't Lutnik only just

kind of saying the quiet part out. >> You're exactly right. In a lot of ways, um, we realize that that, uh, on the one hand, uh, we would like to limit American technology to China. On the other hand, we would like to participate in their market. It is exactly the opposite for them. They would like their Chinese companies to have access to the best technology so that different layers of the AI stack can flourish. Um, and it gives while it gives their local technology companies an opportunity to

catch up, they would like to access American technology, but they would also like to dominate their own market. And so these two ideas are are true in both countries. And so the the the best answer the best answer uh is to let let the system work itself out. I think the uh we need a nuanced answer, nuanced policy where uh America has American companies have access to the most advanced technology, American technology. Meanwhile, um allowing American companies to go participate in

the world's second largest market. Since I spoke with Hang, President Trump said the US would allow Nvidia to sell H200 chips to China with the government collecting a 25% cut of the sales. You mentioned decoupling there and how the two superpowers are still very dependent on one another, but in your industry, chipm which is historically very highly concentrated in Taiwan, uh there is actually a decoupling going on. You uh this last month, October, uh the first

Blackwell ship rolled off a production line from an Arizona factory. Uh and this is a momentous occasion uh because Taiwan is obviously a geopolitical >> we're building the most advanced ship in the world here in America for the very first time. >> But doesn't that explicitly cause a decoupling? I mean, China is building its own domestic semiconductor industry. The US is now building its own domestic fabrication uh of of semiconductors. uh that longtime strategic balance of

Taiwan being this place where you know it's stuck in the middle almost uh too expensive for China to invade because of all of these reasons. Isn't is invasion becoming more likely because of this this decoupling? >> Invasion would any conflict? Um you I I've not heard of of of any specific plans but any conflict um should be should be reduced. And so we shouldn't play a role in in uh uh increasing conflict. Um and uh you know I think I think it's very clear that that

President Trump is is the is a president of peace and and seeks out for peace. With respect to with respect to semiconductor manufacturing I think it's very clear that what we as we as the industry grows having resilience is important. We don't need to decouple. We need to enhance resilience. And so the ability to manufacture in multiple sites in multiple continents for whether for for you know whether electricity reasons or you know weather reasons or earthquake

reasons whatever the reasons are um having having diversity and redundancy in the most critical supply chain it's just wise. Um, we will depend on Taiwan to manufacture chips and electronics for decades to come. Their people, their culture, um, just their network of ecosystems and companies that are built around each other, the efficiency of that of that of that island and building electronics and chips is unheard of, unbelievable. Uh, it's going to take decades to

replicate that. The Chinese government has instructed its army to be ready by 2027 to invade the island. Your policy that you advocate of uh allowing Nvidia chips to be sold to China. Do you think that does anything to the risk of that happening? Does it make it more likely, less likely, or no change? >> Less likely. >> Why? >> Um the reason for for that is very clear. never never never push an adversary or anyone uh to the wall. I it is just it's wisdom uh to ensure that we

replicate that. The Chinese government has instructed its army to be ready by 2027 to invade the island. Your policy that you advocate of uh allowing Nvidia chips to be sold to China. Do you think that does anything to the risk of that happening? Does it make it more likely, less likely, or no change? >> Less likely. >> Why? >> Um the reason for for that is very clear. never never never push an adversary or anyone uh to the wall. I it is just it's wisdom uh to ensure that we

we don't uh elevate the tension of any relationship and um when you take things to an extreme for example all or nothing uh those extremes are are um causes causes um uh reflexes and um uh outcomes that are that are unexpected. And so I I think the uh moderation moderation uh having a a nuanced strategy where United States especially you know the technology is built here in the United States and and is an American company America has every right to make ensure that American companies and

America has the best and the most we have every right and we do that we ensure that and and that's a natural way of how we do business but also to make available to our technology so that we can participate and compete compete in the global market so that the United States could have the largest possible technology footprint. That's that's a wise thing to do. And so I think it's in our interest to do that. I think it's in their interest um with all due respect that Nvidia's technology is quite

advanced and we could be helpful and uh to be in service of the companies the technology companies in China and um uh and we'd appreciate the opportunity to come compete and go earn our opportunities there. And so to to that extent um and we don't we don't cause uh disruptions or um uh cause panic or you know whatever whatever the the emotional feelings are. Of course it'll keep the the tension low and it'll keep the the uh the the relationship you know balanced.

>> I want to talk about Saudi Arabia as well because there are similar dynamics at play there. Um, so in May you traveled to Saudi Arabia with President Trump. >> Uh, and there there were some major deals announced, including uh large shipments of NVIDIA chips uh to Saudi AI companies. Under the Biden administration, those chip exports had been blocked essentially because of concerns that uh Saudi Arabian companies were close to Chinese companies and that the chips could make their way uh via

the Gulf to China. Um, can you describe the role that you played getting the Trump administration to rethink that policy? >> The argument goes like this. AI will be AI is impactful and consequential for every single company and every industry and every nation and the Middle East will absolutely develop AI capability for their ecosystem. Would we like the Middle East to be built on the American tech stack or would we like the Middle East to be built on somebody else's tech stack?

That's really the simple question. And the idea of conceding technology leadership, the idea of conceding a massive market um made no sense to President Trump. And for what reason? Whatever the reasons of the previous administration for conceding, for forfeiting um uh tens of billions, hundreds of billions of dollars of market opportunity uh to another country when we don't have to, when we have the world's best technology, forfeiting just doesn't make sense to President Trump.

>> You just got back from DC where uh the Saudi uh crown prince NBS was in town. M >> you attended a dinner. Um what did you talk about? >> He was very happy um with uh uh the licenses of uh the GPUs, Nvidia GPUs for for the KSA. Um he was uh uh very complimentary of the work that we've been doing. uh you know of course of course his royal highness is both a avid gamer and and his home uh is populated with Nvidia GeForce. He has a he has a a esports um uh you know room uh with with

tens of PCs a game the highest end gaming PCs and underneath the desk is all GeForce and so uh he he's a big fan of GeForce. He's been a customer of GeForce for a very long time and uh and he's he's uh really delighted by the partnership that we have in AI and and grateful for everything that we've done to help him uh help him uh get to this point and so he was just very very happy. I want to switch gears now to talk about uh the social impacts of AI. Um this is a technology that has the

potential to automate many aspects of human labor very soon. And I'm curious the degree to which you feel a responsibility for making that transition go well. >> What AI will do is to make tasks that we do in our job more efficient. Our job is not to wrangle a spreadsheet. Our job is not to type into a keyboard. Our job is generally more meaningful than that. I'm fairly confident that AI will drive productivity, revenue growth, and therefore more hiring. There's a belief

that the world's GDP is somehow limited at a hundred trillion dollars. Well, what's likely to happen is AI is going to cause that hundred trillion to become $200 trillion, $300 trillion, $500 trillion. There's no fundamental limit to the size of a GDP. And so, and the the number of people in the world that is participating in this GDP and the hundred trillion dollar GDP GDP is actually quite small. And so what if we brought the rest of the world, the rest of society, the rest of the world's

population, empower them with AI, give them the opportunity to participate in the GDP and cause this GDP to quintuple. I think that's a very likely outcome and it's very likely that companies will become more prosperous. But it's for certain, this is for certain. Everybody's jobs will change as a result of AI. Some jobs will disappear. Obviously, every single industrial revolution, some jobs are just gone. And but a whole bunch of new jobs are created. Everybody will have to use AI

because if you don't use AI, you're going to lose your job to somebody who does. >> Maybe my final question. Uh Nvidia is Latin for envy. >> It feels like you're on top of the world right now. Is there anything you're envious of? >> You know, as I'm reflecting on I have a pretty great life. I have an incredible family. I've known my wife since I was 17. Um, I've got two amazing kids, 34 and 35. Uh, although they didn't start out working at NVIDIA, both of them work

at NVIDIA today. And and to be able to work hard and work hard with your kids on very important things, and watch them come up with with incredible ideas, unique ideas, and do things that you never knew you could do yourself. Um, to watch him do that and um is it just brings me enormous joy. I obviously have a great company to to to be part of. Uh we're we're uh building the most impactful technology the world's ever known. Uh to be at the center of that is a great privilege and a great

responsibility and of course comes with a great joy. And um uh and I have the support of of uh 40,000 employees. We have incredible retention. I've worked with many of them multiple decades. And uh I've got two great dogs, you know, and and >> most importantly, >> yeah, I've got two great dogs. They both had their ultrasound today. They're apparently quite healthy. Uh you know, Lori takes incredible care of them and they're they're super fit. I Let's see what else can I think of, you know? Uh I

I have access to uh to friends and and partners all over the world. I get to travel. Um I get to go to night markets. I get to enjoy fried chicken in Korea. I mean, what what else does anybody want, you know? I think this is this is actually I would say for for any human, this would be a dream come true.