Nvidia prepares new AI chip for Chinese market

Nvidia plans to launch a new version of its AI chip for the Chinese market that will be compatible with current US export regulations. The initiative comes in response to tighter controls on semiconductor exports to China, which are aimed at limiting advances in supercomputing technology.

In March, Nvidia $NVDA unveiled its new "Blackwell" line of chips, which are expected to be mass produced later this year. Within that series, the B200 is up to 30 times faster than its predecessor at some tasks, such as providing answers from chatbots.

Nvidia plans to work with Inspur, one of its main distributors in China, to launch and distribute the new chip, tentatively dubbed the "B20". According to sources, shipments of the "B20" are expected to begin in the second quarter of 2025.

The sources, who wished to remain anonymous, said Nvidia has not yet made an official announcement. An Nvidia spokesperson declined to comment on the situation and Inspur did not respond to requests for comment.

Following the Reuters report, Nvidia shares rose 1.4% to $119.67 in U.S. premarket trading. Washington has tightened controls on exports of cutting-edge semiconductors to China in 2023 to prevent breakthroughs in supercomputers that could help China's military.

Since then, Nvidia has developed three chips specifically for the Chinese market. These new U.S. export controls have helped Chinese tech giants like Huawei and start-ups like Tencent-backed Enflame tap into the domestic market with advanced AI processors. A version of the Blackwell series chip for the Chinese market could bolster US companies' efforts to meet these challenges.

Last year, China accounted for about 17% of Nvidia's revenue, down from 26% two years ago. Nvidia's most advanced chip for the Chinese market, the H20, performed poorly earlier in the year when its price was lower than a rival chip from Huawei. However, sales are now growing rapidly and Nvidia is on track to sell more than a million of these chips in China this year, which would be worth in excess of $12 billion, according to estimates by research group SemiAnalysis.

The United States is expected to continue to press for controls on semiconductor exports. The Biden administration also has tentative plans to impose rules on the most advanced AI models that form the basis of artificial intelligence software, such as ChatGPT.

Source: Yahoo Finance, CNN.

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