Chamath Palihapitiya says that the U.S. should drop export restrictions on advanced AI chips and let Nvidia Corp (NASDAQ:NVDA) sell freely into China, arguing that holding the line only gives Huawei the oxygen it needs to build a credible competitor.

The comments landed after Jensen Huang joined President Donald Trump‘s state visit to Beijing as part of a 17-CEO delegation that secured fresh clearance for H200 sales into the world’s second-largest economy.

The Huawei Argument

Palihapitiya framed the chip question as a choice between two outcomes. “We want Nvidia to win. We do not want to give enough oxygen for Huawei to then all of a sudden emerge and have a version of a chip that works,” he said.

Models out of China have already closed most of the gap, according to Palihapitiya, who pointed out that Chinese labs have learned to train competitive systems without the highest-end chips.

Salesforce CEO Marc Benioff, also on the show, agreed that Chinese models are “as competitive” as U.S. ones.

The export rules are already loosening.

Trump cleared H200 sales to China during the Beijing trip in exchange for a 25% revenue cut, reversing an April 2025 ban that cost Nvidia roughly $5.5 billion in quarterly revenue, according to a company filing.

Whether the chips actually ship is another question, Beijing has so far blocked Chinese firms from taking delivery, steering demand toward Huawei.

The 18-Month Taiwan Window

Palihapitiya tied the chip argument to a specific manufacturing timeline. The U.S. is “probably one to two nanometers away” from doing domestically what Taiwan currently does as a structural choke point, he said, putting the window at roughly 18 months.

The framing is potentially misleading.

Modern process node names like “2nm” or “3nm” are marketing labels, not physical measurements, and have not described actual transistor dimensions for over a decade.

Each node represents a full generation of process technology that takes years and tens of billions of dollars to develop.

TSMC currently produces 2nm chips at commercial scale in Taiwan. No U.S. fab does.

While tech executives lean into the commercial upside of the unlocked licenses, national security experts warn that the market is underestimating the regulatory tail risk.

Testifying before a congressional hearing on China last month, Dmitri Alperovitch, co-founder of the Silverado Policy Accelerator, strongly opposed relaxing export controls.

Alperovitch dismissed the commercial argument entirely, warning that “providing China with cutting-edge AI chips is the modern equivalent of selling rockets to the Soviets during the space race.”

Polymarket traders price a 7% chance China invades Taiwan this year on more than $23 million in volume. The same platform gives Nvidia a 97% chance of beating earnings and a 66% chance of retaining the title of largest company by year-end.

Nvidia trades at $223, down 1% Monday, ahead of its earnings due Wednesday.

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