American fumble: will the US drop the AI revolution?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Tight end dreams
Nvidia’s smashing earnings
Say no to foreign students

If that’s enough to get the visas declined, read on…

AI Collision 💥

When I lived in London, I used to get tickets every year to the NFL games at Wembley Stadium.

Having never been to the NFL in the US it was quite the event to attend. I always had an affinity for US “football”. I even played the game when I was at university in Melbourne, Australia. I was in the position “tight end”, too slow to be a wide receiver, not big enough to be a lineman. But big enough to block from time to time, and to catch some passes and score touchdowns as well.

Anyway, my sporting prowess aside. There’s one thing in American football you never want to do…fumble the ball.

A fumble says to your team and your coaches, you’re just not good enough. Not good enough skill, not good enough concentration. It’s a fast-track way to get time on the sideline and not on the field.

The idea of fumbling something in sporting sense can also be applied to investing, to opportunity. I’ve fumbled my fair share in the markets over time as well. Albeit I think half the battle in being a great investor is making a fumble and still fronting up for the next play.

But with some things, you only get one chance at the play. And a fumble means you’ll never get another shot at it again, game over, you lose.

When it comes to the high-stakes global race for AI supremacy, America may be on the verge of making the biggest fumble of all-time… and they won’t get another go at the play if they do, that’ll be it, game over, they lose.

Visas, Vetoes, and the Vanishing Braintrust

This week, Nvidia once again stunned Wall Street with another blockbuster quarter. Revenues up 69% from a year ago. Data center revenues up 72% from a year ago.

Net income up 26% year on year and earnings per share up 27% year on year. But all this comes as they took an almighty hit in Chinese revenues because of export controls. In fact, they thought it to be such an issue they plopped it right at the top of the earnings release.

On April 9, 2025, NVIDIA was informed by the U.S. government that a license is required for exports of its H20 products into the China market. As a result of these new requirements, NVIDIA incurred a $4.5 billion charge in the first quarter of fiscal 2026 associated with H20 excess inventory and purchase obligations as the demand for H20 diminished. Sales of H20 products were $4.6 billion for the first quarter of fiscal 2026 prior to the new export licensing requirements. NVIDIA was unable to ship an additional $2.5 billion of H20 revenue in the first quarter.

I can’t reinforce just how dominant Nvidia is and how they are the engine room for America’s AI dominance.

But, behind the headlines lies a quiet unraveling, one that could mark the beginning of America’s slow tumble from the top of the AI pyramid. And it’s something Nvidia is well aware of.

In an interview with CNBC, Huang explained why China is such an important market to Nvidia, and to American AI,

“That’s probably the most important strategic reason to be in China,”

“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.”

The export controls on American AI chips are doing more damage than intended. All it’s done is to further allow overseas companies, and Chinese state-backed efforts to accelerate their own AI chip development.

It’s now a situation where they’re so close to Nvidia’s tech, there’s a chance even if export controls are loosened it won’t matter, because the damage is done and the preferred chip supplier in China and Asia will be Huawei.

Now, that’s one aspect of how the US is managing to fumble the biggest strategic advantage they have over the world right now. The other is that because of regressive immigration policy, they’re on track to ensure the best and brightest minds in the world, are stonewalled from America.

Two weeks ago, Harvard University confirmed it was barred from accepting foreign students into certain research programs under new government restrictions. It’s a glimpse into the changing acceptance of foreign students on American shores.

Visa approvals for AI and semiconductor-related degrees have been quietly stonewalled. Students from India, China, and even parts of Europe are now finding their academic dreams dead on arrival at U.S. embassies.

You might think, “Well, they’re just protecting national security.” But here’s the inconvenient truth, American big tech was built on the back of international intelligence.

According to a report in Politico,

A remarkable 70 percent of Silicon Valley’s highly educated tech employees are from overseas, according to a recent study from a regional think tank — and of that group, China supplies more than any country except India. Eighteen percent of those employees are currently Chinese-born.

Not every Chinese student is a sleeper CCP agent. And if America is shut off from the smartest minds in tech, where do you think they’ll go next?

The irony of America’s future artificial intelligence plans being scuppered by the exodus of human intelligence from America shouldn’t be lost on anyone.

The Exit Wound of Innovation

If you ban foreign students, they’ll go to Toronto, London, Sydney, or Singapore. If you throttle chip exports, China will build Huawei, Baidu, and SMIC into domestic champions.

If you treat innovation like a weapon rather than a magnet, you stop attracting the people who want to change the world, and you start repelling them.

For now, America is still on top. Nvidia is still the king. But that lead is not guaranteed. And these two crazy policies around export controls and student immigration add up to an almighty fumble on America’s part.

AI is not a race won with sanctions and restrictions. It’s won with openness, with immigration, with education, with freedom of research, and with the relentless ability to attract and retain the best minds on Earth. Without that, the future slips away and finds itself on the doorstep of China.

And if that happens, we’ll look back on this moment as the one where with seconds remaining, and a yard away from the end-zone, America fumbled the ball.

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Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

man in black suit jacket and black pants figurine

Boom 📈

C3.ai (NYSE:AI) up 22%
Appen (ASX:APX) up 11%
Tesla (NASDAQ:TSLA) up 5%

Bust 📉

Everspin Technology (NASDAQ:MRAM) down 7%
Alibaba (NYSE:BABA) down 4%
Intel (NASDAQ:INTC) down 1%

From the hive mind 🧠

One in eight people (roughly) in the world, use Meta AI monthly. It’s kind of hard to believe, but that’s what Mark Zuckerberg says. One billion monthly active users of Meta AI. It must be true, right?
This might actually be one of the biggest and most important deals in AI in 2025. Telegram and xAI are now in partnership.
Facebook (as it was then) made Palmer Luckey a billionaire when they bought his Oculus VR company. Then Luckey went and formed Anduril making high tech military weapons. Now, Meta is back in with Luckey and deploying their AI, AR and XR into his crazy weapons. I think I’ll dive more into this next week…