Jensen Huang on Tariffs and Manufacturing in America

Nvidia's CEO, Jensen Huang, has addressed the concerns surrounding the impact of tariffs imposed by President Donald Trump on the tech industry. In a recent interview on CNBC's "Squawk on the Street," Huang stated that the tariffs will not have a significant effect on Nvidia in the near term.

He emphasized the importance of artificial intelligence (AI) in various industries, asserting, "We've got a lot of AI to build... AI is the foundation, the operating system of every industry going forward." Huang expressed excitement about the prospect of increasing manufacturing in the United States, highlighting partnerships with companies to bring production onshore.

"We're enthusiastic about building in America as anybody," he stated. Huang pointed out ongoing collaborations with Taiwan Semiconductor Manufacturing Company (TSMC) to prepare for chip manufacturing in the U.S. Furthermore, he mentioned partnerships with Foxconn and Wistron to support domestic manufacturing efforts.

Despite the ongoing trade tensions initiated by the Trump administration, which has seen tariffs imposed on major trading partners like Mexico, Canada, and China, Huang remains optimistic. He stated that the near-term impact of these tariffs would not be meaningful, allowing Nvidia to focus on its growth and development.

While Nvidia’s stock has experienced a decline of over 20% from its peak earlier this year, this setback was not solely due to tariffs. Concerns about competition from AI developments in China, particularly from the AI lab DeepSeek, have also contributed to the stock's volatility. Huang has contested the theory that companies could achieve superior AI performance with lower infrastructure costs, asserting that the demand for chips will continue to rise.

Nvidia specializes in designing and manufacturing graphics processing units (GPUs) essential for AI advancements. However, recent restrictions on doing business in China, primarily due to export controls introduced by the Biden administration, have affected the company's revenue. Huang noted that revenue from China has decreased by about half as a result of these restrictions, in addition to facing competitive pressures within the Chinese market, including notable competition from Huawei.

Tariffs, AI, Manufacturing