Ben Shapiro says the Trump administration's deal with Nvidia “sounds very cronyistic to me. I am not in love with it.”
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From the August 13, 2025, edition of The Daily Wire's The Ben Shapiro Show
BEN SHAPIRO (HOST): There's a reason why Nvidia is trying to get the United States government to open the Chinese market to Nvidia chips, and that has to do with Nvidia's market cap. And so there is a bit of a catch-22 here.
If you go to war with China over AI, if you cut off the Nvidia chips to China, then, yeah, you're stopping China's development of competitive AI, which I think is really important. But you're also gonna hurt the stock valuation of maybe the most outperforming stock in the American economy right now, Nvidia. So the solution that the Trump administration came up with, which frankly, I'm not super excited about, is a solution in which the United States allows for the sale of the H20, which is kind of their second or third, depending on what chip is available, most important chip to the Chinese. And, by the way, the networking of those chips using a lot of the other infrastructure that Nvidia provides in exchange for the United States basically taking 15% of the chip sale revenue.
According to the Wall Street Journal, apparently, Jensen Huang, who's the chief executive of Nvidia, he worked for months behind the scenes in Washington and Beijing to protect tens of billions of dollars in future sales from the heated US/China trade rivalry. He told President Trump restrictions on US chip sales to China would backfire by pushing China technology champions to achieve self reliance. He advised the president to keep China hooked on American tech. As a sweetener, Huang said the company would invest as much as $500 billion in the United States. His argument, apparently, along with that half trillion dollar offer, appeared to seal the deal. The Trump administration decided last month to allow China to buy that H20 AI chip. Nvidia had developed the H20 to comply with past export restrictions as a less powerful chip specially designed for China, and that, of course, pushed Nvidia's stock up 4%. Beijing reciprocated by allowing a $35 billion deal involving US chip software makers that it had held up for about a year. And they also froze an inquiry into an already completed Nvidia deal. And then the president demanded that Nvidia give the federal government 20% of its chip sales to China in exchange for issuing the export licenses.
All of this sounds very cronyistic to me. I am not in love with it. I really am not.
And by the way, I think that it is actually an offshoot of much of the bad China policy that we saw for literally decades. There the idea was get China hooked on capitalism, and soon there will be political change. Now the idea seems to be get China hooked on H20s, and then they won't build up their own domestic chip production capacity. I do not think that that is the truth. I think China is going to copy that tech. I think they're going to try to rip off that tech. I think they are going to try to brute force their way to superiority in AI, which has real military ramifications for things like, for example, a possible invasion of Taiwan.