Nvidia In China Is Much More Peaceful Than Nvidia Outside Of It

Nvidia is planning a new office and facility in Shanghai. Which makes sense. Already a huge market, China continues to grow.

That’s why it’s puzzling that Sen. Jim Banks (R-IN) and Sen. Elizabeth Warren (D-MA) are protesting Nvidia’s growth mainland expansion. In a letter written to Nvidia CEO Jensen Huang, Warren and Banks claim a facility in Shanghai “raises significant national security and economic security issues that warrant serious review.” The senators are incorrect three times, and surely more.

It’s best to start with simple commercial and economic realities. China is once again a huge, and growing market. For Nvidia to not prioritize the sale of its world-leading products in China would be like Gucci turning up its nose to Beverly Hills. And that’s an understatement.

Banks and Warren would perhaps pivot to the importance of keeping innovative technology out of the hands of an alleged enemy, except that there’s no way to do that. With market goods, there’s no accounting for their final destination. While Nvidia can choose its customers, it can’t choose its customers’ customers. Translated, so long as Nvidia is producing chips, its chips will find their way to China.

Which means there’s no way to keep mimicking foreign eyes off American production, nor American eyes off of foreign production. As longtime Nvidia employee Dwight Diercks has said, “Everyone takes a look at their competitors’ hardware and how it works.” Well, yes.

Luckily the present of chipmaking is invariably the past. As Huang himself put it to Stephen Witt (author of a history of Nvidia, The Thinking Machine), “if we don’t reinvent ourselves, and we don’t open the canvas for the things we can do,” we “will be commoditized out of business.” Assuming the competition can steal Nvidia’s brilliant present, it can’t steal Nvidia’s brilliant minds. That’s very important when it’s remembered that Nvidia’s geniuses never sit still.

Which leads to the “national security” angle. Here it should simply be said that Banks and Warren get things backwards. That’s usually the case when politicians insert themselves into commerce.

How peaceful that Nvidia is trying to expand in China. And that’s because commerce between producers in nations potentially at odds makes war between those nations frightfully expensive. Which means the more Nvidia is selling into China, the more expensive it will be for the U.S. to aim guns and bombs at China. Really, who would want to war with such a great customer?

What’s true for the U.S. is true for China. Again, Warren and Banks plainly fear that with unfettered access to Nvidia products, Chinese producers will make great leaps in the AI space that Nvidia is in many ways the face of. Can the senators promise such a beautiful outcome?

It’s a question worth asking in consideration of the certainty that there are more than a few Steve Jobs types in China just dying to make their global mark on the commercial stage. If so, think of all the amazing, life and commerce-enhancing leaps that Americans will get to achieve thanks to Chinese genius in the AI space. And if Americans are big buyers of Chinese production necessary to take major leaps, it will similarly be expensive for China to direct guns and bombs at the U.S. Trade is not war, it’s war’s opposite.

It’s a reminder that trade among people is easily the greatest foreign policy humankind has ever known. By expanding its presence in China, Nvidia is paving an expanded path for peace between the world’s foremost powers. Banks and Warren should recognize this happy development, and step aside.