Win-win arrangement being turned into loss

Nvidia was reportedly in a hurry to ship some products to Chinese companies. The idea was to do it before the US government's limits on export of artificial intelligence-related chips came into effect in November. As the US government is trying to make the ban immediately effective, Nvidia and other US high-tech companies might have to violate their already signed contracts.

It shows that the US government is ignoring the interests of its companies out of its selfish political considerations. In the financial year 2022-23, Nvidia had got one-fifth of its revenue from China, the percentage rising to between 20 and 25 in the last quarter of the year.

In other words, if Nvidia is banned from selling chips to China, it might suffer major losses. Other US high-tech companies such as Qualcomm are also facing similar disadvantages but the US government doesn't care.

However, the US government's goal of containing China's high-tech industry will never be realized, as no semiconductor supplier is irreplaceable. It benefits both sides when Chinese companies buy chips from the United States; China saves R&D costs while the US earns revenue. By stopping the sale of chips to China, the US will force China to invest more in R&D, reducing its dependency on foreign suppliers. US companies will lose a huge market in the process.

China will just be reinventing the wheel called chips, while the US needs to worry about what it is going to do with all such wheels stored in its warehouses.

The US' stubborn act will only turn a win-win scenario into one that harms it the most, all because of a shortsighted decision taken by the White House.