Jensen and the losers who can't get him

and how technology moat actually works

The idea that I consider completely ridiculous is, why should American companies go compete in foreign countries? You’re going to lose it anyway.

You’re going to lose it anyway, so why go?

Well, if you guys all applied that same philosophy, why wake up in the morning?

I don’t prescribe to ‘we are going to lose anyways.’ I don’t prescribe to that.

If you want me to lose, you’re going to have to deal it to me. But I’m going to have to put up a good fight.

And I put up a lot of fights over the years.

I am doing okay.

- Jensen Huang, Stanford University CS153 guest lecture, May 2026

We have to keep innovating and… The premise that even if we competed in China, that we’re going to lose that market anyways… You’re not talking to somebody who woke up a loser. That loser attitude, that loser premise makes no sense to me.

- Jensen Huang, on Dwarkesh Patel Podcast, April 2026

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In the last post on China Translated, I went through how, in response to the US containment policy, Chinese tech leaders like Huawei and DeepSeek are apparently developing along alternative technological paths by bypassing their relative weaknesses, which have the potential to eventually create a whole new ecosystem across hardware and software that’s independent of the American tech stack.

I also drew on the experience with Chinese EVs to make my point. I reminded you that China tried but failed to surpass the West in traditional ICE cars. Instead, China chose the alternative path of electrification, rendering more than a century of accumulated ICE IP irrelevant and overtaking the Western automobile industry “on the bend.”

It’s very likely that the same EV experience would repeat itself in the semiconductor world, which begs the question of whether US export controls will work at all.

A core assumption behind the export control policies is that if China becomes a more technologically advanced power, it will use that power to hurt the US. In the Dwarkesh Patel podcast episode with Jensen Huang that I kept revisiting for the last essay, Dwarkesh kept invoking the possibility that China would use “Mythos-level” power to attack the US, and a direct analogy was made between AI and nuclear weapons.

Let’s just set aside how ridiculous this assumption is for now, despite the fact that China is not a terrorist power seeking war and conquest. Let’s just assume it’s ALL true. Let’s assume China’s ultimate goal is to destroy the US, just for argument’s sake.

What choices does the US have? Option one is export controls, and doubling down on them (not in the half-hearted way that is reportedly being run right now). Doing this will for sure cause short-term pain for China, but will also force the “galapagosization” I mentioned. So not only can the US not prevent China from having the ability to launch attacks, but there’s also the risk that China can attack using a tech stack that’s entirely foreign to the US, not controlled by the US. Even worse for the US, they will have zero visibility into it.

Obviously, Option 1 is a net loss for the US, however you look at it.

Option 2: trying to get China hooked to the American tech stack. China will develop, but so long as the US itself is also developing at a similar pace, China will at least be developing within the US's control, influence, and visibility. Option 2 does not guarantee US success forever, but at least it won’t guarantee failure as Option 1 does.

This is all very simple logic to me, with a very small margin of error. What baffles me is why this is not common knowledge for everyone, and that when folks like Jensen Huang make similar arguments, he is always met with skepticism and criticism from his home country.

Fighter vs talker

Time to put up a disclaimer here: I am not an American. So what comes next in this essay should be taken with a grain of salt. Furthermore, this newsletter is about explaining China, and so what comes next is not what it should normally cover.

Just treat this as a small role-play, with me as a strategist for the US, thinking in the US's best interests, trying to understand why the US has chosen to sabotage itself, not heeding the call from its best and brightest, like Jensen.

Dwarkesh put Jensen on the edge in that podcast episode, and Jensen appeared unusually combative and started to call people “loser”. The feedback to Jensen from that episode is overwhelmingly negative. It’s like a public trial, where Jensen had a chance to explain himself to America. But in a culture that prizes rhetoric, his blunt language and aggressive behavior have won him more haters than lovers.

But here is the thing, and I talk about this from my perspective as a fellow entrepreneur myself here: Jensen and the people Dwarkesh represents are two different types of animals, with entirely different life experiences and language systems.

Jensen is a fighter. The people who don’t get him are losers — I am sorry, I mean “talkers.”

A fighter fights. A talker talks. A fighter has a winner’s mindset: to compete, to survive, and to be better than everyone else. A talker’s main drive is to get comfortable in the palace of circular logic they build for themselves.

I see most of the criticisms of Jensen come from the talkers - DC think tankers, journalists, and academics - who often lack real-world knowledge of how things work.

When it comes to the world of technology, there are at least 3 basic things a talker doesn’t understand:

1. Technology is never a moat.

Business strategist and investor Hamilton Helmer has a theory of “7 Powers” that explains where business moats come from. They are:

• Scale Economies: the ability to spread massive fixed costs over a vast customer base, meaning a competitor with the exact same technology must charge exponentially more per user just to break even. (e.g., Walmart, Cargill)

• Network Economies: the entrenched user base; even if a rival builds a technologically superior platform, users will not switch if all their friends, suppliers, or customers remain on yours. (Facebook, MasterCard)

• Counter-Positioning: the situation where the incumbents might understand your tech perfectly, but they cannot adopt it without cannibalizing their highly profitable legacy revenue streams. (How Apple beat Microsoft and Nokia in the age of mobile internet)

• Switching Costs: the operational friction and financial pain required to replace your ecosystem; customers will stick with your product if moving to a competitor means retraining their entire workforce or rewriting custom code. (Imagine the pains you will take to switch out of an iPhone to Android, or vice versa)

• Branding: the compounding trust and emotional resonance built over time, allowing you to consistently charge a premium over competitors who offer identical or even better technical specifications. (Coca-cola, S&P)

• Cornered Resource: the preferential, exclusive access to a scarce asset (Think any natural monopolies that need special licenses to operate)

• Process Power: the opaque, complex, often undocumented web of institutional knowledge and hard-to-replicate operational processes that lead to lower costs or superior products. (ASML, TSMC)

It’s very important to note here that none of the 7 powers of business moats comes from technology!

Why? Because, although technology is the spark that creates temporary value, it never stays. Because talents eventually flow. Knowledge eventually diffuses.

Technology can be easily reverse-engineered, copied, or leapfrogged by the next iteration. If your only advantage is having the best algorithm, the fastest chip, or the cleanest code, your margins will eventually collapse as competitors eventually catch up - and competitors always catch up.

The real moat is something that even if you spill your secret formula all over the place, you are still unbeatable. For instance, it will be naive to believe that Coca-Cola’s business power comes from its “high-tech”, “secret” recipe. No, its power comes from its tight grip over consumer consciousness and a massive distribution network it has built over the century.

This is why forcing Nvidia to stop selling to China on the grounds of superior technology is shortsighted. It protects something that is unworthy to be protected in the first place, while creating substantial harm to at least 6 actual superior structural powers that Nvidia (and by extension the US) enjoys:

• Forcing Nvidia out of China makes it relatively subscale compared to the ideal scale it otherwise could have enjoyed, preventing it from spreading its R&D costs across a larger revenue base to the fullest extent and eventually hurting Nvidia’s long-term ability to set prices in the most competitive way.

• The real strength of Nvidia is not just a chip, but a web of ecosystem consisting of hardware, software, networking standards, and knowledge that constitutes a real network effect. If you want to change one thing, you have to change everything else, making it extremely sticky. Now, the US is forcing China to develop its own ecosystem that keeps Nvidia out. At some point, Nvidia will no longer be the pre-eminent ecosystem in the world. An alternative ecosystem may rise, challenging Nvidia’s strategic position in the rest of the world.

• Giving the competing ecosystem a chance to grow naturally lowers switching costs away from the incumbent ecosystem and diminishes the brand equity that Nvidia would otherwise enjoy.

• China used not to have “counter-positioning” against the US. But now, by breaking the export link, Chinese firms like Huawei enjoy a unique counter-positioning to develop on their own, while Nvidia can do nothing to disrupt them.

2. Technology is not on a piece of paper.

I mentioned that none of the “7 powers” has anything to do with technology. I was not 100% correct.

I also mentioned that there are 6 powers at risk for Nvidia, but I have discussed only 5 above. The final one I haven’t mentioned is “process power”.

Process power can also be understood as some form of technology. In fact, it’s the only type of technology that’s worth a place on the list of Helmer’s 7 Powers.

People who live in the fanciful world of 007 movies like to imagine technology as a magical piece of information stored somewhere. Accessing it, you will unlock all the powers of the world. This is much like how medieval kings viewed gold as a fixed asset that you could lock in a vault and keep away from rivals forever.

The real world is much more boring.

Take TSMC as an example. All the physics in chip-making are known. There is nothing mysterious. But knowing the physics doesn’t mean you can run the factory.

Process power is derived from the factory floor. It is the opaque, infinitely complex web of institutional muscle memory that accumulates over decades. TSMC’s moat is not that they bought the best EUV lithography equipment, but that they have spent twenty years fine-tuning millions of interconnected operational steps to achieve a massive, profitable yield on a silicon wafer where a competitor with the exact same equipment would fail.

You cannot copy such power by stealing a blueprint. This is not something that you can fit on a USB drive. You cannot hire away one chief engineer and expect them to miraculously transplant it into your own company. This power, this “technology”, is deeply embedded in the culture, the daily habits, the unspoken routines, the suffering through the grueling and unglamorous years of building from scratch, and the trial-and-error scars of tens of thousands of mid-level engineers working in concert. It is operational excellence compounded by history.

So what do export controls do for process power? First, it gives Chinese companies a chance to develop their own process powers. And remember, process power is the only form of technology that matters. Once Chinese firms have built that power, export controls cannot take it away. You can restrict the sale of a physical chip, but you cannot embargo an entire organization’s fundamental ability to execute.

Second, it stops Western firms like Nvidia from participating in the same process of building up this new process power. It will be China's process power. It will be China’s technology, China’s moat.

3. No advantage stays forever. The game is perpetual.

Talkers believe that strategy is a board game. You capture the territory, you build a wall around it, and you hold it forever. They view American technological dominance as a static fortress that simply needs to be defended with lawyers, tariffs, and export decrees.

Fighters like Jensen know that technology is not a fortress. The past is not the future. Everything is in flux. No winning should be taken for granted. It’s a constant struggle. There is no finish line, and there is never a moment when you can sit back and relax. The moment you stop sprinting and instead choose to build a wall, you begin to lose, because you are refusing to join this constant struggle.

Winning is also a mindset. The crucial first step for a winner is to believe you can win, then compete with everything you've got, and never settle for whatever past glory you have achieved.

In this perpetual game, the only thing you can do to retain a plausible chance of winning is to keep running and leverage every tool at your disposal to add to your scale, your network effect, and process power to ensure that by the time your rival finally reverse-engineers today’s technology, you are already generations ahead.

I don’t know whether I will hope the US to take this advice or not.