Nvidia and Anthropic Split as US Chip Export Rules Near May 15 Start

The clash broke into the open when an Nvidia spokesperson dismissed Anthropic's account of how chips reach China. "American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters,'" the spokesperson said, according to CNBC.

Anthropic is the AI startup backed by billions from Amazon. In a blog post on Wednesday it argued for tighter controls and more enforcement. The post said Chinese smuggling tactics involved chips hidden in "prosthetic baby bumps" and "packed alongside live lobsters." Anthropic pointed to the 2022 arrest of a woman carrying chips into China and the 2023 seizure of "computer display cards" with a lobster shipment in Hong Kong. The post laid out a detailed case for stricter rules. Nvidia rejected it outright.

The timing matters. Chip restrictions from former President Joe Biden's term, called the AI Diffusion Rule, are set to take effect May 15. The rule puts global export controls on advanced AI chips and model weights. The aim is to stop rival nations like China from gaining ground in an escalating AI arms race. President Donald Trump is reportedly working on updating those restrictions, which adds another layer of uncertainty to a policy area that was already contested.

Anthropic does not sell chips, but it relies heavily on Nvidia hardware to train its models. That makes its lobbying position awkward. The tighter restrictions it wants could limit Nvidia's overseas business and its revenue from chip sales.

Anthropic argued that compute access is the key strategic chokepoint in the race to build frontier AI. It proposed lowering the export threshold for Tier 2 countries, tightening the rules to reduce smuggling risks, and increasing funding for enforcement. "Maintaining America's compute advantage through export controls is essential for national security and economic prosperity," the company wrote.

Nvidia's response was unusually sharp. A spokesperson said the company should not be limited by policy. "China, with half of the world's AI researchers, has highly capable AI experts at every layer of the AI stack. America cannot manipulate regulators to capture victory in AI," the spokesperson said.

Anthropic stood by its position. "Anthropic stands by its recently filed public submission in support of strong and balanced export controls that help secure America's lead in infrastructure development and ensure that the values of freedom and democracy shape AI," a company spokesperson said in a statement.

Nvidia CEO Jensen Huang has been making a different argument in public. Speaking in Washington, D.C. on Wednesday, he said China is "not behind" the US in AI and praised Huawei as a top global tech company. "They're incredible in computing and network technology, all these essential capabilities to advance AI," Huang said. "They have made enormous progress in the last several years."

Huang's position has hardened since. At the Computex tech forum in Taipei on 21 May, he called US chip export controls a "failure" because they had spurred Chinese developers. "The local companies are very, very talented and very determined, and the export control gave them the spirit, the energy and the government support to accelerate their development," he told media at the show, according to The Guardian.

He also put numbers on the damage. Huang said Nvidia had written off "billions of dollars" in sales. Its share of China's AI chip market, he said, had fallen from almost 95% at the start of the Biden administration to 50%. In mid-April he made a surprise visit to Beijing. There he met the head of the China Council for the Promotion of International Trade, according to Chinese state media, and DeepSeek founder Liang Wenfeng, according to the Financial Times. The visit came days after further US restrictions banned shipments to China of Nvidia's H20 datacentre GPUs, a lower-powered version designed to comply with Biden-era rules.

The policy fight is not only about chips. China's commerce ministry accused the US of "abusing export controls to suppress and contain China." It called new warnings to other countries "typical unilateral bullying and protectionism, which seriously undermine the stability of the global semiconductor industry chain and supply chain." It warned that "any organisation or individual that enforces or assists in enforcing such measures" could be in violation of Chinese law.