Noah Smith
· Noahpinion
· April 29, 2026 at 00:38
· ⏱ 7 min read
| Read on Substack ↗
Summary
Noah Smith argues that Jensen Huang's defense of selling AI chips to China is incoherent and self-contradictory, and that the successful controls on chipmaking equipment (ASML's EUV) are the reason the debate even exists. For markets, this reinforces Nvidia's competitive advantage from export restrictions and highlights the critical role of ASML in maintaining U.S. chip leadership.
•Nvidia's profit has grown to $120 billion a year, largely from selling advanced AI chips, contradicting Jensen's claim that China can substitute with older chips.
•There are two distinct types of U.S. export controls: those on chipmaking equipment (e.g., ASML's EUV machines) and those on AI chips themselves (e.g., Nvidia's Blackwell).
•Jensen argued China already has enough compute, but later admitted China is 'limited in compute' and forced to invent smart workarounds, undermining his own position.
•Dwarkesh Patel's main argument for export controls is that America needs to maintain a security edge in AI, especially with models like Anthropic's Mythos that have superior hacking abilities.
•Trump has significantly loosened chip export controls, a policy that the author implicitly critiques by highlighting the incoherence of Jensen's arguments.
The article critiques Jensen's incoherent arguments but ultimately affirms that Nvidia's advanced chips confer important advantages (otherwise why would AI companies pay huge premiums?). Export contro
The article critiques Jensen's incoherent arguments but ultimately affirms that Nvidia's advanced chips confer important advantages (otherwise why would AI companies pay huge premiums?). Export controls help preserve Nvidia's monopoly-like position by restricting China's access, which supports NVDA's pricing power and margins.
Risk: Political loosening of export controls (as Trump has done) could erode this advantage. Also, the article itself notes Jensen's arguments were poor, which may signal management tone-deafness.
The article states there is 'very little debate' about controls on chipmaking equipment (ASML's EUV machines) and that the 'stunning success of the equipment controls is the only reason we're even hav
The article states there is 'very little debate' about controls on chipmaking equipment (ASML's EUV machines) and that the 'stunning success of the equipment controls is the only reason we're even having a debate about the chip controls'. This highlights ASML's strategic irreplaceability and the sustained demand for its lithography tools despite geopolitical friction.
Risk: Any future policy shift allowing EUV sales to China would be negative. Also, ASML is subject to Dutch export controls and U.S. pressure, creating regulatory overhang.
This newsletter, published April 29, 2026,
features Noah Smith
discussing NVDA, ASML.
2 trade ideas extracted by AI with direction and confidence scoring.