WEBVTT - Nicholas Burns Talks Nvidia Blackwell Chips and China

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>Joining us now as we widen the lens on this

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<v Speaker 2>whole story involving Nvidia export controls and on a greater

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<v Speaker 2>scale US China relations, is Nicholas Burns, the former US

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<v Speaker 2>Ambassador to China and the Biden administration professor at Harvard's

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<v Speaker 2>Belfast Center. Mister ambassador, welcome back to Bloomberg TV and Radio.

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<v Speaker 2>It's great to have you. It seems all roads lead

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<v Speaker 2>to China, or we're talking about in Nvidia or new

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<v Speaker 2>tariffs on India. So let's start where we're already talking,

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<v Speaker 2>and that's export controls in this idea of Nvidia opening

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<v Speaker 2>once again a new market in China. There's even reporting

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<v Speaker 2>today that in Nvidia is talking about a Blackwell chip

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<v Speaker 2>that might be available scaled down version for the China market.

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<v Speaker 2>But there's still no deal and from what we understand,

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<v Speaker 2>no licenses to begin reselling these AI chips in China.

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<v Speaker 2>Will it happen?

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<v Speaker 3>This is going to be a consequential decision for the

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<v Speaker 3>Trump administration. US policy for several years now, for three years,

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<v Speaker 3>has been to deny to China those dual use exports

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<v Speaker 3>like advanced chips for Ai purposes that might then help

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<v Speaker 3>the People's Liberation Army to outcompete the United States military

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<v Speaker 3>in this ferocious competition for military technology power that's underway

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<v Speaker 3>and that will in many ways define the relationship. And

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<v Speaker 3>you saw when President Trump permitted the sale of the

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<v Speaker 3>Navidia and twenty chip, the Chinese government turned around and

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<v Speaker 3>said that they had problems even they might not give

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<v Speaker 3>authority to Chinese companies to purchase the chips because they

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<v Speaker 3>suspected these chips could be problematic for them. And so

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<v Speaker 3>now you have a second decision coming up by the

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<v Speaker 3>Trump administration. I certainly hope that the Trump administration will

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<v Speaker 3>be as tough minded as President Biden was deny this

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<v Speaker 3>technology to China, because it's far more important that the

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<v Speaker 3>United States weakened the People's Liberation Army and not strengthen

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<v Speaker 3>it by allowing the sale of an advanced chip.

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<v Speaker 2>Well, you know, if you talk to Jensen Wong about that,

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<v Speaker 2>he would tell you that that only strengthens Huawei and

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<v Speaker 2>in fact strengthens China's hand to sell this type of

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<v Speaker 2>technology if it were to catch up with the United

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<v Speaker 2>States to other countries. Do you believe that we're mortgaging

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<v Speaker 2>our national security by selling this technology.

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<v Speaker 3>Oh, I believe that there'd be a great injury to

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<v Speaker 3>our national security if we sold this technology. We certainly

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<v Speaker 3>realize that in twenty twenty two, when the Biden administration

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<v Speaker 3>could in place these stringent export controls, we understood this

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<v Speaker 3>would be problematic for those American ship producers exporting to China.

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<v Speaker 3>But there's something more important at stake here, the national

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<v Speaker 3>security of the United States, the balance of military power

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<v Speaker 3>between China and the United States. And while certainly the

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<v Speaker 3>Chinese have gone a long way towards innovating now around

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<v Speaker 3>these export controls, we were never under any illusion they

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<v Speaker 3>would stop progress technological progress in China, but we would

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<v Speaker 3>delay progress, and that has happened. So I think President

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<v Speaker 3>Biden's initial decision nearly three years ago now was correct,

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<v Speaker 3>and it's very important the Trump administration hold the line.

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<v Speaker 3>I think you'll hear that from many members of Congress

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<v Speaker 3>in both political parties.

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<v Speaker 2>By the way, yeah, you'll hear from them right here

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<v Speaker 2>on this program. I'm sure. As we consider what some

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<v Speaker 2>would describe as an economic cold war here, or at

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<v Speaker 2>least a trade war with China, the prospects of pushing

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<v Speaker 2>India closer to China has been on the table this

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<v Speaker 2>week with now a fifty percent tariff that the US

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<v Speaker 2>has put on India. Half of that was added as

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<v Speaker 2>punishment for India buying Russian oil. Ambassador I talked about

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<v Speaker 2>this last evening with Peter Navarro, the White House Senior

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<v Speaker 2>Counselor for Trade and Manufacturing. He made a lot of

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<v Speaker 2>news not only here but in Delhi today with his

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<v Speaker 2>answer what he said about India's Prime Minige Modi and

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<v Speaker 2>its culpability regarding Russia's war in Ukraine.

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<v Speaker 1>Let's listen, everybody in America loses because of what India's doing.

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<v Speaker 1>The consumers and businesses and everything lose, and workers lose

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<v Speaker 1>because India's high tariffs costs as jobs and factories in

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<v Speaker 1>income and higher wages. And then the taxpayers lose because

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<v Speaker 1>we got a fun Mody's war.

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<v Speaker 2>Mody's War was the headline on the front page of

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<v Speaker 2>every major newspaper this morning in India, and it led

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<v Speaker 2>all of their newscasts. When he said that last evening,

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<v Speaker 2>it was considered an insults and framed to be inaccurate.

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<v Speaker 2>What do you make of this rhetoric coming from the

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<v Speaker 2>White House.

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<v Speaker 3>I think it's unfortunate. I also think it just doesn't

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<v Speaker 3>make a lot of sense. If you look at the

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<v Speaker 3>history of the US India relationship, you know, we have

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<v Speaker 3>this historic competition with China underway really for which of

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<v Speaker 3>US is going to be the strongest country in the

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<v Speaker 3>Indo Pacific and in the world in the future. India

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<v Speaker 3>has been now for twenty five years, one of the

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<v Speaker 3>key strategic partners of the United States. Every American president,

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<v Speaker 3>starting with President Bill Clinton, Democrat and Republican, has believed,

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<v Speaker 3>and this includes President Trump in his first term, that

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<v Speaker 3>we've got to get along with India, We've got to

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<v Speaker 3>strengthen our military partnership because that strengthens our ability to

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<v Speaker 3>leverage China and to make sure that China is hemmed

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<v Speaker 3>in in its territorial ambitions on the India China border,

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<v Speaker 3>in the Himalayas, but also in places like the South

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<v Speaker 3>and East China Sea. So I understand that the Trump

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<v Speaker 3>administration believes in this policy of high terraffts. But when

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<v Speaker 3>you exact these high terriffs on India, Japan, South Korea,

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<v Speaker 3>the European Union, you're weakening our natural coalition of countries

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<v Speaker 3>that want to be with us in terms of going

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<v Speaker 3>up against the Chinese and limiting their power. But it's

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<v Speaker 3>difficult to do when you've got fifty percent American terrorists

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<v Speaker 3>on Indian products coming into the United States. Every country

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<v Speaker 3>has domestic politics, every leader just like that. As a

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<v Speaker 3>Trump today politics.

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<v Speaker 2>It's already happening. We're reporting that in March Beijing began

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<v Speaker 2>quiet outreach to India. President she wrote a letter to

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<v Speaker 2>test the waters on improving ties. I have less than

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<v Speaker 2>a minute, and I don't want to cut you off, ambassador,

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<v Speaker 2>but where does this end with this letter?

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<v Speaker 3>Well, you know there's going to be an historic meeting

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<v Speaker 3>between President Hijin Ping and Prime Minister Modi on September

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<v Speaker 3>third in Beijing. And this is this is a step backwards,

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<v Speaker 3>a major step backwards for the United States, because we

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<v Speaker 3>had since the end of the nineties, long time ago,

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<v Speaker 3>we've established this true partnership with India, and now it's

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<v Speaker 3>at risk because of this misguided terrorists pop tariff policy

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<v Speaker 3>by the Trump administration.

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<v Speaker 2>There you have it from Nicholas Burns, the former US

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<v Speaker 2>ambassador to China and the Biden administration ambassador. Thank you

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<v Speaker 2>for your insights.