Hey everyone, welcome back to the Elon Musk Podcast.
I'm thrilled to share some exciting news with you over the
next two weeks. We're evolving.
We'll be broadening our focus to cover all the tech Titans
shaping our world. And with that, our show will
become Stage 0. You'll still get the latest
insights on Elon Musk, plus so much more, so stay tuned for our
official relaunch at Stage 0 coming soon.
Now let's get into this episode. the US Department of Commerce
told NVIDIA that it now needs an export license, one that will be
required indefinitely before it can send its H2O artificial
intelligence chips to China. Marks a new and unexpected
escalation in Washington's ongoing effort to limit China's
access to high performance computing technology.
Now, the H2O chip is Nvidia's most capable AI product
currently permitted for sale in China under previous
restrictions, and that status has now changed.
In its regulatory filing, NVIDIA said the government justified
the decision based on a perceived risk that the H2O2
might be used inside a supercomputer operated from
Chinese territory. Now the news landed with a thud.
NVIDIA stock dropped roughly 6% in after hours trading, and the
company warned of a $5.5 billion charge tied to the disruption in
its next financial quarter, which ends April 27th.
Now, the stakes are very high here.
Nvidia's not just another tech vendor, it's the engine behind
everything AI right now. This chips power nearly every
major artificial intelligence platform, from Open a is Chat
TPT to Metas Llama to China's most advanced homegrown models,
too. Now that includes Deepseeks R1,
which is a reasoning focus. Large language model then
emerged in January and briefly rattled the USAI sector with its
unexpectedly strong performance. And some U.S. officials had
already been pushing to tighten restrictions on H2O, concerned
it could give Chinese firms A foothold to catch up or even
surpass US advancements in certain types of model training.
These concerns have materialized into formal policy now.
Now, the backdrop to this decision involves more than tech
specs, though. This last week, reports emerged
that NVIDIA CEO Jensen Wong had dinner with former President
Donald Trump at Mar a Lago. Now he it was suggested that
Wang usually use the opportunity to negotiate software
restrictions on the H2O chip. A part of the reported
discussion included NVIDIA pledging to increase its
investment in domestic chip production.
Coincidence or not, NVIDIA followed up Monday by announcing
it would spend hundreds of millions of dollars over the
next four years to manufacture a portion of its AI chips in the
US Now. The announcement was light on
details such as which chips, in what quantity, and at which
facilities, but was interpreted as a possible effort to placate
regulators or demonstrate alignment with national
industrial policy goals. Now, the importance of the H2O
chip specifically lies in its performance envelope.
It was designed to skirt the limits set by earlier export
rules while still offering enough horsepower to train large
scale AI models. The video's intent was clear,
though, to maintain a legal foothold in China's growing AI
market without triggering additional controls.
That calculation seems to have failed.
US regulators are now treating the H2O as too risky to leave
unregulated, and by requiring a license that may never be
granted or may come with added compliance burdens, the new rule
effectively blocks widespread H2O shipments to China.
And for NVIDIA, this development cuts off a major path for
monetizing one of his most strategically engineered
products. And for China, it means fewer
options for legally acquiring high performance AI hardware
from the West. For policy makers, it raises the
question of whether aggressive tech controls will yield the
desired results or simply accelerate the decoupling of
global AI ecosystems. Now, the broader context here is
that AI capability is increasingly being treated as a
matter of national power. Controlling who gets access to
the best chips becomes a lever of international influence.
The US is making a bet that slowing China's access to top
tier semiconductors will delay the country's ability to match
American advances now. Meanwhile, Nvidia's trouble
wasn't the only tech headline of the week.
In a completely separate arena, Open AI is testing something
with potentially massive consequences of its own a
prototype social media platform built around ChatGPT.
This is an internal project right now, still in the early
phases. Now it includes a social feed
focused on AI generated images. And sources say open AICEO.
Sam Altman has been quietly seeking feedback from trusted
outsiders. It's not clear whether this
product will launch as a standalone app or an added
feature inside ChatGPT itself. But it's clearly more than just
a thought experiment. Now, Altman's move into social
media would pit him directly against Elon Musk and Mark
Zuckerberg, both of whom are already leveraging their
platforms X and Meta to collect real time social data for
training large language models. Altman has already made public
jabs in that direction. When Musk offered to buy open AI
for 97.4 billion in February, Altman responded no thank you.
But we will buy Twitter for 9.74 billion if you want.
Our data is the current currency of modern AI.
Platforms like X and Instagram are troves of constantly
evolving human behavior. Owning a social app wouldn't
just give Open AI more training data, it would give them
something Musk and Zuckerberg already possess, an infinite
stream of fresh content shaped by real people.
Now. It's still unknown if Open AI
will green light the social app for public release, though.
Even internally, the project is very experimental, but it's mere
existence signals how the company is thinking about
staying competitive as the race to lead an AI enters a new
phase. Now let's get back to NVIDIA a
little bit. It challenges it's challenge.
Now let's get back to NVIDIA. It's challenges this week aren't
just business problems, the geopolitical ones.
Washington's new restriction signals a growing willingness to
weaponize technological exports. And for a company like NVIDIA,
caught between demand and China and policy in the US, the path
forward is now absolutely harder to navigate. the US just made
Nvidia's business in China more difficult, and Open AI is
thinking about launching a social media app.
Both moves signal how AI companies are being pulled into
new battles over power, access and control, and what control
they have over you. Hey, I need a second of your
time. For the past four or five years,
I've been bringing you in depth, no nonsense insights from the
world of Elon Musk. But I need your help to keep the
show alive and growing. If you'd love what you hear,
consider supporting Stage 0 on patreon@patreon.com/stage 0
News. By joining our Patreon
community, you'll get exclusive content and a chance to shape
future topics. Everyone has a voice and your
support goes directly into making this show absolutely
better, and it helps me keep bringing you the content that
you enjoy every single day. If you're getting value from
Stage 0 News, becoming a patron is the best way to make sure
this journey keeps going. So let's make the next five
years even bigger together. There's a link in the show notes
just for you. Hey, thank you so much for
listening today. I really do appreciate your
support. If you could take a second and
hit the subscribe or the follow button on whatever podcast
platform that you're listening on right now, I greatly
appreciate it. It helps out the show
tremendously and you'll never miss an episode.
And each episode is about 10 minutes or less to get you
caught up quickly. And please, if you want to
support the show even more, go to patreon.com/stage Zero.
And please take care of yourselves and each other.
And I'll see you tomorrow.