Donald Trump Was Right, Jensen Huang Should Have Fought For His Job

China can’t keep its rare earths out of the United States, the U.S. can’t keep its AI chips out of China, and Jensen Huang should have taken Donald Trump's advice about fighting for his job.

The obvious must be stated as eternal scolds like Sen. Elizabeth Warren fault Huang and Nvidia itself “for putting our national security at risk.” Implied in Warren’s rant is that trade is a national security risk, and that governments can dictate where market goods end up to the betterment of a nation’s national security. Wrong and wrong.

Economic illiteracy has needlessly removed a business genius from the commercial world. Talk about a national security threat, for the U.S. Seriously, do you the reader sleep easier knowing Jensen Huang is no longer running Nvidia?

In the question is hopefully found the misguided thinking that informs the anger of Huang's critics. See the Wall Street Journal’s reporting on where Nvidia’s highly regarded AI chips wound up.

Megaspeed, the company associated with Alice Huang (you know, the “Honeypot”), indicated that Hangzhou-based Alibaba would be “an anchor customer” for data centers located in Malaysia. Readers who feel safer with Jensen Huang out of the CEO’s chair should keep the location of data centers serving Chinese companies in mind. Export bans don’t stop trade, they just re-arrange where the goods wind up.

Readers should also contemplate what the Journal added, that Singapore-based Megaspeed shipped some of the AI chips it purchased from Nvidia “to a Shanghai cloud-computing provider called Century-Litong.” It turns out buyers don’t always hold on to what they’ve purchased. Which is the point.

There’s no controlling the destination of any good. Never. Short of Nvidia hoarding its chips, they were going to make their way around the world. This includes Iran, Russia, North Korea, and yes, China. See Nvidia’s market cap if you’re still confused.

In the above readers can hopefully grasp how feverish domestic and global demand is for Nvidia’s AI chips, but also how inevitable it was that in producing the world’s greatest AI chips, Nvidia was trading with the world regardless of export bans, national security aims, or both. This is basic economics.

There was quite simply no way to keep Nvidia’s genius from reaching China. Good. And it's good because trade exemplifies national security. Exactly because customers would prefer not to shoot at customers, trade makes war frightfully expensive. Very good.

From there, we can say that national security is very expensive. This being true, the economic growth explicit in Nvidia’s chips being acquired around the world produces more of the resources necessary to fund a robust military assuming the unthinkable happens whereby the political classes in the U.S. and China commit economic suicide with the money of others.

Please consider this with Alice Huang in mind. Spy or not, what difference would it make? Genius can’t be stolen. And if it can be “copied” as some will say, then it's logically not genius.

As for the prurient details used as a pretext for the political and economic ignorance that forced Jensen Huang out of Nvidia, two questions: if you’re not a Nvidia shareholder, is it any of your business? Second, do you believe staggering economic achievement can be separated from a desire within the producers of it to sometimes be validated by it? In the questions are hopefully the answers.

President Trump was right: Jensen Huang should have fought for his job to stop the vandalism not just of economics, but U.S. national security itself. Yes, it’s really difficult to invade the richest countries. Something about relatively unlimited means to hit back.

Originally published on Real Clear Markets.