Why Nvidia is rooting for Chinese AI

[00:00:00]There is a very hot debate in Washington and in Silicon Valley about whether to regulate Chinese models, open-source models. And um Jensen Huang weighed in on this, the Nvidia CEO, of course. He he talked with Axios. And I'm going to play for you what he had to say. He basically said the US has nothing to fear from China's open-source AI models.

[00:00:20]>> These China Chinese models are excellent. Uh open open-source models uh that are excellent should be used.

[00:00:26]And so the market has misunderstood the impact of DeepSeek the first time. It's misunderstood the Yeah, it's it's misunderstood the the impact of Kimia again this time. I think first of all, with great AI open models, it's great for the whole industry. Obviously, when there's more if there's great AI, even if it's open, uh wherever it comes from, uh there will be more use. Whenever there's more use, you'll have to sell a lot more Nvidia computers, we'll have to build more data centers, we'll have more services, the technology will diffuse into more industries. And so starting point is great models lead to great use, which leads to great growth.

[00:01:08]>> So interesting that he's talking about that cuz a couple things stand out to me, Dan. One, um it's good for Nvidia if there's more use of [laughter] of AI. Um two, you know, Nvidia has stakes in a lot of the companies that will be competing with the open-source models out there. Um so in that way it's not necessarily in their financial interest.

[00:01:28]And three, he doesn't even touch and maybe he does elsewhere in the interview, to be fair. Um he doesn't even touch the Chinese security concerns about these open models.

[00:01:37]>> Yeah, I think one of the things to keep in mind with these open open models is they're they're open weights so that you can you can make certain adjustments but not, you know, fully kind of go in and and kind of tool with it on your own.

[00:01:48]You can customize it to a degree. What What are the things that's uh noteworthy about open-source software is that so many people, because it's open source, usually are messing with it that they're addressing cybersecurity issues on the spot. So, you know, that's what makes open source software so kind of secure.

[00:02:10]It seems stupid because you're like, well, everybody has access to it. Why would it be safe? But it's because everybody has access to it that it is.

[00:02:18]They're all, you know, trying to ensure that it's it's not, you know, something that people can can break. Um when it comes to what Jensen said uh on the, you know, uh deep seek versus Kimmy uh K3 is, you know, kind of what what they continue to say is if it becomes easier to run models, more people will buy our our hardware because they'll want to run more models.

[00:02:44]>> Mhm.

[00:02:45]>> So, that the thinking is, okay, we have more companies that can afford to run models or get access to models, they're going to need to power that somehow, and they'll use our soft our hardware. The other flip side of that is that uh his his regular uh kind of uh approach is the more hardware you put behind a model, the better the responses are. So, in other words, the the, you know, the the bigger the engine, the faster the car goes. Uh that's what what he's regularly applying to these kind of AI models as well. So, you know, I don't I don't see this as as necessarily a negative for Nvidia. Um but, you know, I I think it it kind of leads to the question of how far into this argument can he go because of the geopolitical implications, you know, Nvidia's trying to get back on sale in China. China's saying maybe some companies will take this. The US has, you know, banned certain chips, then kind of flipped on that. And so, it's it's interesting to see him kind of go out and and talk about this kind of stuff. Yeah, it's crucial to his business, but also, you know, could raise uh could be like kicking a hornet's nest in Washington if >> Yeah.