FirstFT: Nvidia chief warns of ‘enormous damage’ to US tech from chip war with China

The US tech industry is at risk of “enormous damage” from the escalating chip war between Washington and Beijing, said the chief executive of Nvidia, the world’s most valuable semiconductor company.

Ahead of his company’s earnings report today, Jensen Huang told the Financial Times that export controls introduced by the Biden administration against Chinese semiconductor manufacturing had left the Silicon Valley group with “our hands tied behind our back” and unable to sell advanced chips in one of the company’s biggest markets.

At the same time, he added, Chinese companies were starting to build their own chips to rival Nvidia’s market-leading processors for gaming, graphics and artificial intelligence.

“If [China] can’t buy from . . . the United States, they’ll just build it themselves,” he said. “So the US has to be careful. China is a very important market for the technology industry.”

Huang’s comments came just days before Chinese authorities announced a ban on US chipmaker Micron’s products from critical infrastructure, a move seen as the first significant retaliation against Washington’s export controls.

Here are two more reads on chips:

If you’re interested to hear more on the impact of the US-China tech war, FT and Nikkei Asia journalists will be holding a subscriber-exclusive webinar tomorrow. Submit your questions and register for free here.

Here’s what else I’m keeping tabs on today:

• Economic data: The UK’s headline inflation rate is expected to fall when official figures are released. Ifo publishes its business climate index for Germany, and Nigeria reports gross domestic product for the first quarter.

• Central banks: The US Federal Reserve releases minutes from its May rate-setting meeting, while the European Central Bank celebrates 25 years with remarks from president Christine Lagarde in Frankfurt. Bank of England governor Andrew Bailey speaks at the Net Zero Delivery Summit in London.

• US politics: Republican Ron DeSantis is expected to announce his bid for the presidency in a conversation with Elon Musk to be held on Twitter.

• Results: In addition to Nvidia, Abercrombie & Fitch, Analog Devices, Marks and Spencer, Severn Trent and SSE report.

Five more top stories

1. Investors now expect the US Federal Reserve to keep interest rates higher for longer after stubbornly high inflation readings and strong economic data. Traders are reducing bets on a series of cuts, putting them more in line with the central bank’s consistent messaging about battling price pressures. But the shift also underlines intense uncertainty over where markets are headed next.

2. Siemens’s chief has vowed to expand its market share in China, which accounts for 13 per cent of the company’s revenues, despite increasing pressure from Berlin on German businesses to diversify away from the country. Here’s why Roland Busch thinks pulling out is “not an option”.

3. The EU is sticking to plans to grab lucrative clearing business from London, rebuffing calls from leading derivatives houses to rethink its strategy to wrest euro-denominated clearing from the City. The bloc’s financial services commissioner Mairead McGuinness said the proposal was vital to the bloc’s “financial resilience”.

4. Exclusive: Britain is set to lose a high-profile solar power investment from Oxford PV, the photovoltaics company spun out from Oxford university, after its chief technology officer said the UK was the “least attractive” market to locate a new factory.

5. Samsung Electronics is facing the threat of its first-ever strike over wages, with a 10,000-strong union demanding a 6 per cent pay rise for workers. The South Korean giant is offering 4 per cent, close to the inflation rate. Read the full story.

The Big Read

Periods of inflation have often boosted gold, and this time it is not just being bought by elites — central banks worried about geopolitical risk purchased a record-high 1,079 tonnes of bullion last year. As a result, the precious metal has been hovering close to its nominal all-time high of $2,072 per troy ounce since late March. How long will the new gold boom last?

We’re also reading . . . 

• Labour embraces ‘Bidenomics’: UK shadow chancellor Rachel Reeves has endorsed a muscular industrial policy not unlike Biden’s Inflation Reduction Act but says spending must comply with fiscal rules.

• AI ‘losers’?: The idea that the outcome of technological change is inevitable is both dangerous and untrue, writes Sarah O’Connor.

• Business in China: The increasingly hostile environment for consultancies in the country has made western businesses uneasy, writes Joe Leahy.

Chart of the day

US regional banks are rushing to use reciprocal deposits, which funnel a portion of customer cash to other lenders, to offer security far exceeding government-backed insurance to soothe clients unnerved by the recent banking turmoil.

Take a break from the news

The Bulgarian writer Georgi Gospodinov has won this year’s International Booker Prize for his novel Time Shelter, a hard-hitting comedy set in present-day Europe that explores political populism and the way nostalgia can be exploited to create a confected past.

Additional contributions by David Hindley and Emily Goldberg