TL;DR
Jensen Huang told shareholders national security comes first and that data centres built with smuggled Nvidia chips cannot function without support.
Nvidia CEO Jensen Huang told shareholders on Wednesday that if a commercial opportunity conflicts with US national security, the company would prioritise American interests. “National security comes first,” Huang said in a session shortly after the company’s annual stockholder meeting concluded.
Huang addressed the chip smuggling problem directly, arguing that anyone trying to build AI data centres with diverted Nvidia hardware would fail. “Advanced AI data centres are massive integrated systems that require trusted hardware, software, networking, and continuing support,” he said. He described the prospect of assembling data centres from smuggled products as a dead end.
The message was pointed. If a company wanted to smuggle Nvidia chips or systems into countries with export restrictions, such as China, Huang said they would face challenges getting the hardware working because Nvidia would not provide support or repairs. Without that ongoing relationship, he argued, the systems cannot operate at the scale modern AI demands.
The remarks arrive against a backdrop of escalating enforcement. Supermicro co-founder Wally Liaw was charged in March with conspiring to smuggle roughly two and a half billion dollars in Nvidia-equipped servers to China through a front company in Southeast Asia, using heat guns to swap serial numbers and staging dummy servers to fool auditors. Liaw has pleaded not guilty, and the case is set for trial in November.
Taiwan followed with its first criminal prosecution of AI chip smuggling in May, raiding 12 locations and seeking detention orders for three people accused of using forged documents to route Nvidia servers to mainland China. The crackdown has driven grey-market prices for Nvidia’s B300 servers in China to roughly one million dollars, nearly double the US list price.
Huang’s comments also come two weeks after the US government ordered Anthropic to shut down its most powerful AI models, Fable 5 and Mythos 5, citing national security concerns over a reported jailbreak. Anthropic, which uses Nvidia chips for training, called the action disproportionate. The episode underscored Washington’s increasingly aggressive posture toward AI technology it considers sensitive.
Nvidia’s own relationship with China has been shrinking steadily under export controls that began in 2022. About nine percent of the company’s fiscal 2026 revenue came from China including Hong Kong, down from 13 percent the prior year. The Trump administration cleared sales of Nvidia’s H200 chip to approved Chinese firms last year, but Huang told shareholders the company has not generated any revenue from those licenses and does not know whether China will allow imports.
On the business side, Huang declared that the question of AI return on investment “has been answered.” He pointed to GitHub, where pull requests nearly tripled this year because of AI-generated code, as evidence that useful AI output translates directly into demand for more computing power.
“Nvidia systems may not be the cheapest to purchase, but Nvidia generates the lowest cost tokens, the highest token throughput, and the most revenues,” Huang said. The company generated over 96 billion dollars in free cash flow in fiscal 2026 on revenue of 216 billion dollars.
Huang reiterated that Nvidia plans to return 50 percent of its free cash flow to investors through share repurchases and dividends over the next few years. The board approved an additional 80 billion dollars in buyback authorisation in May and raised the quarterly dividend from one cent to 25 cents per share.
At the meeting, shareholders re-elected all 10 board members, approved the executive compensation plan in an advisory vote, and passed one outside proposal requiring that all shareholder votes win with a simple majority. The company ratified PricewaterhouseCoopers as its auditor for fiscal 2027.
The “dead end” framing is strategic. Huang is simultaneously reassuring Washington that Nvidia takes export controls seriously and telling customers in restricted markets that buying smuggled hardware is a losing proposition. Whether that message reaches the brokers and intermediaries who have been routing billions of dollars of Nvidia servers through Southeast Asia is another question entirely.
