Nvidia is redesigning its artificial intelligence chips to comply with U.S. export restrictions while continuing to sell to Chinese companies. This is part of the company’s ongoing strategy to stay active in the vital Chinese market despite growing political and economic pressures.
According to a recent report by The Information, the chipmaker has already notified some of China’s biggest tech firms about the changes. These companies include Alibaba, ByteDance (the parent company of TikTok), and Tencent.
In mid-April, Nvidia CEO Jensen Huang traveled to Beijing. During his visit, he reportedly met with executives from Chinese tech giants. He told them that Nvidia is working on new AI chip models that adheres to U.S. export rules but are still powerful enough to support their AI operations.
This comes shortly after the U.S. government tightened restrictions on Nvidia’s existing AI chips — specifically the H20 chip — which had been the only legal high-end model the company was allowed to sell in China. These new rules are expected to cost Nvidia as much as $5.5 billion in lost sales.
Nvidia plans to release new chips by mid-year
Nvidia had already developed China-specific chips, including the A800 and H800, to respond to earlier U.S. constraints. Yet even those models were eventually outlawed in updated U.S. guidelines released in October 2023. The company is revamping its chips entirely to fit the narrow legal constraints.
Sources familiar with the matter say Nvidia has already told its Chinese clients that samples of the new chip will be ready by June 2025.
In addition to this, the company is also developing a separate version of its next-generation AI chip, known as the Blackwell series. The Chinese version — the “B20” — is designed to meet export regulations while offering competitive performance. Shipments of this chip could begin as early as the second quarter of this year.
This approach highlights Nvidia’s commitment to remaining a key player in the Chinese AI market, even as it must navigate increasing legal and political obstacles.
Nvidia adapts amid U.S.-China tech dispute
The United States has been trying to limit China’s access to the most powerful AI chips, citing national security and competitive concerns. Washington officials fear these chips could be used for military purposes or to boost China’s position in the global AI race.
In response, Nvidia has had to walk a tightrope. It must comply with U.S. laws while also trying to meet demand from China — one of its largest and most lucrative markets.
China, in turn, has increased efforts to develop its chip-making industry. However, many experts say the country still depends heavily on U.S.-designed chips for advanced AI training and cloud computing tasks.
Nvidia has declined to comment publicly on the recent developments. ByteDance, Tencent, Alibaba, and the U.S. Commerce Department have also not responded to media requests for comment.
The stakes are high for Nvidia. Its chips power much of the world’s AI software, from self-driving cars to cloud-based services and generative AI like ChatGPT. Losing access to the Chinese market would hurt its bottom line and could slow the global spread of AI tools.
At the same time, any misstep in complying with U.S. export rules could lead to fines or more restrictions.
Huang’s remarks and Huawei’s chip push reshape the global AI race
Nvidia’s competition in AI has reached a critical juncture, with CEO Jensen Huang openly stating that “China is not behind” in artificial intelligence development.
At a Washington D.C. tech conference on April 30, Huang described the technological rivalry as “very close” and a “long-term, infinite race” – comments contradicting the prevailing Silicon Valley narrative about Western technological supremacy.
His frank assessment comes as Chinese tech giant Huawei begins widespread deployment of its domestic AI chips to clients left scrambling after Washington’s export controls effectively cut off their access to Nvidia’s advanced semiconductors.
Huang elaborated on China’s AI capabilities and praised Huawei specifically. “They’re incredible in computing and network technology, all these essential capabilities to advance AI,” he said of the Chinese tech giant. “They have made enormous progress in the last several years,” he added, according to CNBC reporting.
Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
