I think if NVIDIA moves outside of the US, Trump would have no choice but to keep exempting their products from the import tariffs since there’s no US-made alternative at the moment and there won’t be one for a while. But NVIDIA may not have a choice but to move out, especially if they want to keep their market position against Chinese firms over the long run. If they stay in the US they face a likely future of being locked into the US market with the rest of the world being dominated by whatever competitive accelerators come out of China. If they move out, and especially if they move to China, they could become the CCP-blessed domestic AI hardware maker, before another Chinese firm is able to get there. They’ll have the world market to export to as well as the US, for as long as the US doesn’t have a competitive product. After that it’ll be just the rest of the world since China’s NVIDIA product would always have price advantage compared to US offerings. Of course under a China NVIDIA scenario they likely won’t be able to keep their IP fully closed or their profit margins within China, and perhaps abroad.
Bigger problem than tmsc is that China will just “legitimately” steal all IP and replace them with another company within a year. Moving to China is insane if you don’t plan to bend over for the party.
Yes. There are plenty hugely successful Chinese companies. The hypothetical I’m considering is NVIDIA becoming a successful Chinese company, not an American company trying to do product development in China. It won’t be a foreign company to steal IP from and there won’t be a need to replace it with another one.
Right, for profit companies famously have a history of just handing themselves over to totalitarian regimes.
There are Western for-profit companies who have Chinese subsidiaries developing and selling products in China. They make profits on those sales and hand them over to their shareholders in the West and in China. The Chinese government fully allows this so for-profit companies regularly do it. And yes the Chinese state often is a direct or indirect shareholder. But so could be Berkshire Hathaway. It’s not about handing over the ability to profit. It is about making profit. Also, Western for-profit companies often sell themselves to Chinese firms. E.g. Smithfield Foods, Syngenta and many others.
China has no successful companies that aren’t approved, controlled and often subsidized by the party.
That’s an interesting assertion. As far as I’m aware it’s typically the other way around. The companies that grow to be large enough or strategic enough give partial ownership to the government. Of course the government subsidizes important industries like every competent state does, but that doesn’t mean it owns every company it subsidizes. There’s no point in owning small fish. Some of those that grow even have foreign ownership. For example BYD has Berkshire Hathaway and BlackRock as some of its major shareholders.
So in the case of NVIDIA, it’s entirely plausible for the company to move operations in say Shenzhen, retaining most of its current ownership, perhaps giving some ownership to a Chinese state company. The profits keep flowing to BlackRock, Vanguard, Fidelity and Jensen Huang. Pretty sure they’ll approve it if it means more future profits compared to staying in the US and being unable to sell to China and others. For example if Trump decides that both EU and China are bad hombres and forbids AI chip sales to them, while the US economy tanks, decreasing the domestic sales.
Super relevant argument that ccp allows some companies to grow before they take over. And yes, obviously nobody would do business in China if they didn’t share the profits. Hopefully nobody will ever do business again with a shithole like russia.
Except Nvidia is the third largest company in the world with a ton of existing IP that they would effectively be handing over to a country that has a history of stealing IP without any repercussions and had the resources to take advantage of that IP and make Nvidia irrelevant.
True. That’s a problem with the China route at this point. In a few years however I’d expect SMIC to be competitive with TSMC. They’re doing their damnest to get there and given the pressure and resources thrown at it, I think it’s a matter of time.
I think if NVIDIA moves outside of the US, Trump would have no choice but to keep exempting their products from the import tariffs since there’s no US-made alternative at the moment and there won’t be one for a while. But NVIDIA may not have a choice but to move out, especially if they want to keep their market position against Chinese firms over the long run. If they stay in the US they face a likely future of being locked into the US market with the rest of the world being dominated by whatever competitive accelerators come out of China. If they move out, and especially if they move to China, they could become the CCP-blessed domestic AI hardware maker, before another Chinese firm is able to get there. They’ll have the world market to export to as well as the US, for as long as the US doesn’t have a competitive product. After that it’ll be just the rest of the world since China’s NVIDIA product would always have price advantage compared to US offerings. Of course under a China NVIDIA scenario they likely won’t be able to keep their IP fully closed or their profit margins within China, and perhaps abroad.
Bigger problem than tmsc is that China will just “legitimately” steal all IP and replace them with another company within a year. Moving to China is insane if you don’t plan to bend over for the party.
Yes. There are plenty hugely successful Chinese companies. The hypothetical I’m considering is NVIDIA becoming a successful Chinese company, not an American company trying to do product development in China. It won’t be a foreign company to steal IP from and there won’t be a need to replace it with another one.
Right, for profit companies famously have a history of just handing themselves over to totalitarian regimes.
China has no successful companies that aren’t approved, controlled and often subsidized by the party.
There are Western for-profit companies who have Chinese subsidiaries developing and selling products in China. They make profits on those sales and hand them over to their shareholders in the West and in China. The Chinese government fully allows this so for-profit companies regularly do it. And yes the Chinese state often is a direct or indirect shareholder. But so could be Berkshire Hathaway. It’s not about handing over the ability to profit. It is about making profit. Also, Western for-profit companies often sell themselves to Chinese firms. E.g. Smithfield Foods, Syngenta and many others.
That’s an interesting assertion. As far as I’m aware it’s typically the other way around. The companies that grow to be large enough or strategic enough give partial ownership to the government. Of course the government subsidizes important industries like every competent state does, but that doesn’t mean it owns every company it subsidizes. There’s no point in owning small fish. Some of those that grow even have foreign ownership. For example BYD has Berkshire Hathaway and BlackRock as some of its major shareholders.
So in the case of NVIDIA, it’s entirely plausible for the company to move operations in say Shenzhen, retaining most of its current ownership, perhaps giving some ownership to a Chinese state company. The profits keep flowing to BlackRock, Vanguard, Fidelity and Jensen Huang. Pretty sure they’ll approve it if it means more future profits compared to staying in the US and being unable to sell to China and others. For example if Trump decides that both EU and China are bad hombres and forbids AI chip sales to them, while the US economy tanks, decreasing the domestic sales.
Super relevant argument that ccp allows some companies to grow before they take over. And yes, obviously nobody would do business in China if they didn’t share the profits. Hopefully nobody will ever do business again with a shithole like russia.
Except Nvidia is the third largest company in the world with a ton of existing IP that they would effectively be handing over to a country that has a history of stealing IP without any repercussions and had the resources to take advantage of that IP and make Nvidia irrelevant.
There is a problem though, if they move to China they can’t produce at TSMC. That is why I stated outside US jurisdiction. Apart from that I agree.
True. That’s a problem with the China route at this point. In a few years however I’d expect SMIC to be competitive with TSMC. They’re doing their damnest to get there and given the pressure and resources thrown at it, I think it’s a matter of time.