Jensen Out, MATCH Act In?

Jordan Schneider, Dylan Patel, and Jordan Nanos of SemiAnalysis record an emergency pod after Jensen Huang’s resignation as Nvidia CEO. We discuss: Why Jensen’s exit could become cover for “really stupid laws” — and why Dylan backs the MATCH Act but thinks RASA is a mistake. The game theory of remote access: renting compute to Chinese firms as margin capture and a kill switch, versus closing the Malaysia loophole outright. “Flip the table”: why equipment controls beat chip and model controls, and how close Huawei’s silicon now is. Why no American lab has out-built Kimi or DeepSeek in open models. Nvidia without Jensen: talent retention, Rubin and Feynman execution risk, and who should run the company. Colette Kress’s exposure, Supermicro and Megaspeed, and a fight over whether this amounts to the “nationalization” of Nvidia. Listen now on your favorite podcast app . Jensen Resigns Jordan Nanos: Hey, Dylan. Hey, Jordan. Did you guys hear the CEO of the world’s largest and most important company just resigned? Dylan Patel: No. Jordan Nanos: Are you serious? What could possibly have led to that? Well, there are allegations of some pretty serious conduct violations. Apparently you can’t sleep with your subordinates and keep your job. Jordan Schneider: Wait, Jordan — we’ve got Elon, we’ve got Sergey, everyone in Silicon Valley. Once you get to a trillion dollars, I think you’re legislated to start sleeping with your subordinates. There must be something else. Jordan Nanos: The trillion-dollar class might be fine, but once you get to $5 trillion, you have problems with this sort of stuff. Jordan Schneider: Then woke 2.0 really starts coming after you. Jordan Nanos: We’re rotating back. Jordan Schneider: This is truly a momentous day for the future of America, China, and artificial intelligence — and Dylan somehow looks bored, or just drained. How are you processing it? Dylan Patel: Dude, I don’t know. You look up to this guy, and then he does these things. It’s not fun. There’s a lot going on and a lot to contemplate. We shouldn’t even talk about the future of Nvidia — we should talk about the future of open source, the future of AI, and US-China relations. I’ve obviously been a hawk — “or a fucking bald eagle,” as we said on a prior podcast — for quite some time. But I’m worried this is going to be used as cover to pass really stupid laws. Nvidia without Jensen is a much weaker company. Whether Nvidia’s interests are America’s national interest — most people would say yes, but some people in this audience would probably say no. It’s pretty clear Nvidia’s chips were ending up in China, knowingly or not. It’s probably just knowingly. Jensen and Nvidia were the biggest opponents of cutting off chip sales to China, and now they’re out of play. So what regulations pass? I hope this means the MATCH Act passes. That is far more important for the US national interest than the Remote Access Security Act (RASA). RASA is a pretty dumb bill. [Context: The Remote Access Security Act (RASA) would amend export control law to clarify that remote access to U.S.-controlled chips counts as an export. This makes cloud rental subject to the same rules as shipping the chip itself. RASA passed the House 269-22 in January of this year, but no Senate vote has been held or scheduled. A parallel Senate version is stuck in the banking committee, and no version of the current NDAA text includes RASA. The Senate version of RASA directly targets “foreign persons of concern” (generally interpreted as China, Russia, Iran, North Korea, companies whose ultimate parent is headquartered in those countries, and Entity List firms). As designed, RASA would cover only single-customer clusters that are big enough to provide frontier training. This threshold is Commerce’s to set following consultation with chipmakers, AI labs, and cloud providers. RASA would not cover inference rentals, smaller allocations, API access, smuggled chips, or chips already in China. Perhaps most importantly, RASA does not ban anything itself. The text in the Senate says “may” and the House text acts only if the Secretary “determines” a serious risk. There is no deadline nor minimum in place here. Likewise, Commerce can choose whether to wind down existing leases or run them to term. These flexibilities should be viewed as a feature not a bug. This bill settles the legal authority, adds material penalties, and sets up the system to survive a change of administration. RASA, then, gives Commerce the tools to titrate access to rented chips as it deems appropriate.] Dylan Patel: Biden-style diffusion controls should totally be done. But if the US government passes RASA, that’s going to be really bad for American interests — short, medium, and long term. The other undertone is that you can’t just ban everything. China can and will exploit the fact that its components are in every single Nvidia server, every Google server, every Amazon server. You cannot build these things without them. So there is a level of tit for tat here. That’s my main take for this audience. MATCH vs. RASA: How Much Compute Should China Rent? Jordan Schneider: Let’s start with MATCH and RASA. For those who haven’t been following my MATCH Act shilling over the past few months, the idea is that advanced DUV lithography — alongside EUV, which already can’t get into China — shouldn’t be able to go into China. RASA is slightly different. It aims to close the cloud-access loophole through which Alibaba, Tencent, and ByteDance can currently, legally, access GPUs that are banned from import into China, by setting up cutouts in Malaysia — which you guys have done such a great job untangling. Dylan, why don’t you expand on why you think RASA is such a bad thing? Dylan Patel: What is the US national interest? It’s (a) to maintain as large a lead in AI as possible, for as long as possible, and (b) to control China’s access to AI as much as possible. If that’s your goal, you do not prevent China from having any compute, because that actually means the US will have no compute either. If you fully ban everything, I believe China will start waging economic war too. In 2022, I stayed up all night reading the October 7th chip restrictions. I wrote that China and the US were officially in a new Cold War — an economic war. I found about 20 loopholes and posted about them that very night, and I’m just one dude, not an army of lawyers. I was hoping they’d get patched. Many still aren’t. One key premise of the original restriction, which I think is mostly true, is civil-military fusion: the Chinese military and state can and will appropriate any resource for military and intelligence purposes, even if it’s completely commercial. We’ve seen it with Douyin and TikTok, which is about as consumer as you can get. At the same time, China will respond. We’ve seen it with the trade wars and the auto tariffs — almost shutting down American auto plants, threatening rare earths. China has threatened a lot of actions, carried out some, then pulled back to show its fangs. If you ban chips from China completely, including rental and deployment, there is no reason for China not to blow the whole thing up. You have to have some tit for tat. The optimal American policy is the minimum amount of compute China can have, with the maximum American oversight, such that China won’t blow up the supply chain — because we very clearly do not have the stomach to disentangle the supply chain. We just don’t, over and over again. Given that China can’t have zero chips, the way to minim