Jensen Huang, co-founder and CEO of NvidiaThank you for reading this post, don't forget to subscribe!
Ethan Pines for Forbes
During a stormy week in mid-September, Nvidia found itself in the nation’s capital: Founder and CEO Jensen Huang was participating in a closed-door meeting with the Senate about artificial intelligence. A day earlier, the chipmaker’s chief scientist, Bill Daley, testified before a Senate Judiciary subcommittee about possible generative AI legislation. And the same day, Nvidia, along with several other tech companies, signed a voluntary pledge on AI security during an event at the White House.
The Washington visit highlighted an important aspect of business for Nvidia: a delicate dance in Washington, maintaining relationships with government officials as the company’s profile rises and it becomes the face of a national effort to disrupt China’s AI progress. Has gone.
As artificial intelligence has become the dominant technology in Silicon Valley, Nvidia has become one of the most valuable companies in the world. The company, founded more than 30 years ago and first known for its gaming technology, is now a trillion-dollar giant, thanks to its highly coveted graphics processing units, or GPUs, which are used to train AI models. . The artificial intelligence arms race has also made US officials wary of China’s potential as an AI superpower. As a result, Nvidia, as the market leader in GPUs, is a means through which regulators are blocking access to the most cutting-edge technology in an effort to keep China out.
To prepare for the road ahead, Nvidia has been quietly beefing up its in-house lobbying operation, according to a review of LinkedIn profiles. forbes, a change from its historically low lobbying output. Within the past year, the chip giant has hired at least four government affairs staffers in Washington, DC – all former federal employees with previous experience at agencies including the US Treasury, State Department and Homeland Security.
That’s a smaller step than Nvidia’s chipmaker peers, who are more likely to be in Washington. Rivals AMD and Intel spent $2.7 million and $5 million, respectively, on lobbying last year, according to OpenSecrets, which tracks money in US politics. Nvidia’s trillion-dollar counterparts spend even more: Last year, Alphabet spent $10.9 million, and Meta spent $14.6 million. By comparison, Nvidia’s lobbying is much smaller: $350,000 was spent last year. Nvidia declined to comment.
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“This is the first time he’s really had to think very seriously about these issues,” said Chris Miller, the book’s author. chip war and Professor of International History at Tufts University. He said other chip companies have more “institutionalized” government affairs operations. For example, Intel, with its manufacturing plants, is likely lobbying around the CHIPS Act, which aims to bring more chip production to the US (Nvidia, by contrast, outsources chip manufacturing to partners including TSMC.) But With AI taking center stage, Nvidia may feel the need to make more noise in the lobbying arena.
“Since they haven’t had to deal with this kind of focus on them from the political regulatory system in the past, I think it’s natural that the company is spending more time and effort dealing with it,” Miller said.
James Lin, an international relations professor in the China Studies program at the University of Washington, put it another way: “They’re saying, ‘We have to treat the government like an everyday business.’”
In October, the White House announced new export restrictions on chips sold to China, cutting off the country’s access to the most advanced processors designed by American companies. The move was to further tighten mandates announced a year earlier. In response to the sanctions, Nvidia indicated it would develop less-capable semiconductors to sell to Chinese customers to comply with the regulations. Two weeks ago, the company confirmed that it would begin selling the RTX 4090D in China later this month, a less robust version of one of the company’s gaming chips.
Getting the conversation right with the government is very important as the company faces potential political hurdles with respect to business in China, and promoting a US-first approach will be important.
“I view the topics of emerging AI technologies and the growing bio-economy as particularly important to the future of American competitiveness and security,” Eric Brackenfeld, Nvidia’s director of technology policy and engagement, wrote in his LinkedIn profile. Brackenfeld, who began his role at Nvidia in July, previously held positions at DARPA, the Defense Department’s technology division of skunkworks, and contractor Booz Allen Hamilton. “I believe that the implementation of these technologies is inextricably linked to our social values in a way that the disruptive technologies of previous decades were not. Therefore, not only for economic competitiveness, but also for national security, it is imperative that the United States continue to set the pace of innovation for core multidisciplinary technologies.
Glenn O’Donnell, vice president and research director of Forrester, said that the US government’s actions have taken the chip industry into new territory. forbes, The decision to ship substandard products is usually driven by cost or component shortages, not national security concerns, he said. “Geopolitics has always been part of the chip business,” O’Donnell said. “But I’ve never seen anything like it before.” He believes that Nvidia is in such a strong position that the company will be able to easily absorb any hit to sales from China’s sanctions.
Nvidia’s government relations efforts are led by Ned Finkel, Nvidia’s vice president of external affairs, a 21-year veteran of the company who began his career as a field sales manager for Texas Instruments in 1983. Many other tech giants also have government affairs experts. Microsoft’s chairman is Brad Smith, who criticized the British government for blocking Activision’s acquisition of the company. The president of global affairs at Alphabet is Kent Walker, who led Google’s landmark antitrust case against the Justice Department. Meta features former UK Deputy Prime Minister Nick Clegg, who has been a spokesperson for some of Facebook’s biggest political decisions, such as reinstatement of former President Donald Trump to the social network.
While Nvidia is complying with the White House export restrictions, it has also been vocal about its disagreement with it. Over several months last year, Nvidia, along with rivals Intel and Qualcomm, reportedly conducted a lobbying campaign across Washington urging the government to reconsider, including meetings with Secretary of State Antony Blinken and Commerce Secretary Gina Raimondo. Were also included. “The risk you’re taking is fueling the growth of an ecosystem that’s led by competitors,” said Tim Teter, general counsel at Nvidia. the new York Times In July. “And that could have a very negative impact on U.S. leadership in semiconductors, advanced technology and AI.”
It’s a difficult path to walk, said Lin, the international relations professor. “They don’t want China’s supporters to portray them as pro-China,” he said. “They don’t want to be seen as trying to compromise America’s national security.”