Nvidia CEO Jensen Huang explains why chip exports to China are strategically important

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In a Wednesday interview with CNBC's Jim Cramer, Nvidia CEO Jensen Huang explained why he thinks it's necessary to export his company's artificial intelligence technology to China, saying trade with the country is vital if the U.S. wants to be a global leader in AI.

"That's probably the most important strategic reason to be in China," Huang said. "Because there are so many developers there and because the world is going to adopt technology from one country or another — and we prefer it to be the American technology stack."

Nvidia posted better-than-expected earnings and revenue Wednesday night, sending shares up in extended trading. While the quarter showed that demand for Nvidia's technology continues to grow, Huang said on the call that President Donald Trump's restrictions on its chips mean that the "$50 billion China market is effectively closed to U.S. industry."

Huang told Cramer the regulations will lead to the loss of billions in revenue to Nvidia and tax revenue to the U.S. But more importantly, he emphasized, losing out on the Chinese market has lasting global ramifications for the U.S. Historically, he said, the platform that succeeds is the one that has the most developers — and China is home to 50% of the world's AI researchers.

"We want every developer in the world to prefer the American technology stacks," Huang said. Once that happens, he continued, "American technology stacks will run AI the best all over the world."

Huang claimed Nvidia will "keep our dialogue going" with the Trump administration.

"We understand the technology best, and we understand how computing works," Huang said. "We understand how AI works, and we've been in China for 30 years, and so this is an area that we have a lot of, a lot of expertise, and we're going to continue to share that."