Nvidia CEO Jensen Huang defends Chinese AI models as U.S. weighs restrictions amid 'Kimi panic'

Jul 22, 2026

Following the July 16, 2026 release of Moonshot AI's highly capable and low-cost Kimi K3 model, which helped fuel a semiconductor stock sell-off during which the Philadelphia Semiconductor Index fell 12.5% in one week, Nvidia CEO Jensen Huang defended Chinese open-source AI models as “excellent” and urged Washington not to ban them. Huang argued that free, open models drive hardware and data center demand, benefiting Nvidia. Meanwhile, Treasury Secretary Scott Bessent said the U.S. was examining Chinese models for possible intellectual property theft and could impose sanctions.

Jensen Huang defends Chinese models

▪Nvidia CEO Jensen Huang rejected concerns that Chinese models would outcompete American firms, stating there is zero possibility of China running U.S. companies off the road.
▪Nvidia CEO Jensen Huang urged Anthropic on July 21, 2026, to make its restricted cybersecurity model, Claude Mythos, available to everyone as a service.
▪Nvidia CEO Jensen Huang stated on July 21, 2026, that American companies should absolutely be allowed to use Chinese open-source artificial intelligence models.

Kimi K3 benchmark performance

▪Moonshot AI released Kimi K3, a 2.8-trillion-parameter open-weight model with a 1-million-token context window, on July 16, 2026.
▪Moonshot AI's Kimi K3 model ranked third on Artificial Analysis' Intelligence Index and first on LMArena's blind Frontend Code Arena board.
▪Moonshot AI's Kimi K3 costs $15 per 1 million output tokens, compared to $50 for Anthropic's Fable 5 and 87 cents for DeepSeek V4.

Semiconductor market selloff

▪Nvidia's stock price dropped from $212.50 to $207.40 following the launch of Moonshot AI's Kimi K3 model on July 16, 2026.
▪The release of Moonshot AI's Kimi K3 model helped fuel a semiconductor stock sell-off, during which the Philadelphia Semiconductor Index fell 12.5% in one week.

US sanctions consideration

▪White House Office of Science and Technology Policy Director Michael Kratsios alleged on July 22, 2026, that Moonshot AI distilled Anthropic's Fable model to develop Kimi K3.
▪The White House had considered a draft executive order that would impose security requirements and potential liability on U.S. companies using Chinese artificial intelligence models, but the proposal stalled.
▪Treasury Secretary Scott Bessent stated on July 21, 2026, that the United States is examining Chinese artificial intelligence models for intellectual property theft and considering sanctions.

Open-source security arguments

▪Nvidia CEO Jensen Huang argued that open-source models make artificial intelligence more secure by allowing outside researchers to inspect them and expose weaknesses.
▪Nvidia CEO Jensen Huang dismissed concerns that downloaded Chinese models create backdoors to Beijing, noting companies can run them in secure sandboxes.

Nvidia China revenue loss

▪Nvidia CEO Jensen Huang has opposed export controls for two years while endorsing restrictions on exporting Nvidia's Blackwell and Rubin architectures to China.
▪Nvidia's revenue from China has fallen to nearly zero from a business that Nvidia CEO Jensen Huang previously estimated could be worth $50 billion annually.