China Bans AI Layoffs as Nvidia CEO Says AI Created 500K Jobs in 2 Years

China’s courts are beginning to draw a line on AI job loss. This is even as companies continue to invest heavily in automation. A recent ruling from Hangzhou suggests that replacing workers with AI cannot be used as a simple cost-cutting tool. The decision comes at a time when concerns about AI replacing workers are growing globally. Meanwhile, the industry leaders like Nvidia’s CEO argue that the impact on jobs is being overstated.

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Court Rules AI Cost-Cutting Illegal, Huang Blames “God Complex CEOs” for Hysteria

A ruling published on April 28 by the Hangzhou Intermediate People’s Court found that a company had illegally dismissed an employee after attempting to cut his salary on the grounds that AI could handle his role. According to reports, the employee, a QA supervisor earning 25,000 yuan a month, was asked to accept a reduced salary of 15,000 yuan. When he refused, he was terminated. The court went on to rule in his favor.

The judgment sheds light on China’s AI law. Courts have clarified that adopting AI is a “strategic choice” and not a “major change in objective circumstances.” This means it cannot justify layoffs on its own. Several companies are expected to explore options such as retraining or reassignment before terminating employees.

In a separate case in Beijing, a similar conclusion was reached. A worker was dismissed after his data entry role was replaced by automated systems. Arbitration authorities ruled that automation alone did not meet the legal threshold for dismissal.

The rulings come as China’s AI sector continues to expand rapidly. The country’s core AI industry surpassed 1.2 trillion yuan in 2025, with more than 6,200 companies operating in the space.

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Nvidia Pushes Back on AI Job Loss Narrative

At the same time, Nvidia CEO Jensen Huang has taken a different stance on the broader debate around job creation. Speaking on a recent podcast, he said AI has created over 500,000 jobs in the past two years. He also pushed back against claims that AI will lead to increased job losses. Huang noted that such narratives were unhelpful. He added,

“These kinds of comments are not helpful, they’re made by, you know, people who are like me, CEOs. Somehow, because they became CEOs, they adopt a God complex, and before you know it, you know everything.”

Huang added that firms adopting AI tend to grow faster and hire more workers. He also criticized some tech leaders for overstating risks.

The contrast shows a growing divide. While China’s legal system is setting limits on how companies use AI in workforce decisions, several parts of the tech industry continue to frame AI as a net driver of employment.

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