AI raises those stakes even further, with its increased privacy and data security concerns, as well as its potential market size. Huawei’s threat to Nvidia mirrors the threat it posed to Cisco. And with a $25 billion R&D budget, armies of well-trained engineers and the support of the Chinese government, Huawei has enormous market power.

In a closed-door meeting with the House Foreign Affairs Committee, Nvidia (NASDAQ:NVDA) CEO Jensen Huang didn't mince words: Huawei is catching up fast in the AI chip gameand U.S. policy might be helping them do it.