Nvidia Plans New AI Chips for China Amid U.S. Export Restrictions

Nvidia (NASDAQ:NVDA) is preparing to launch a new AI chip for China in the coming months that complies with U.S. export controls, according to Nikkei Asia. The upcoming chip will be a downgraded version from its previous Hopper series and will not include high-bandwidth memory (HBM), placing it below the performance level of the H20 chip currently sold in the country.

The chipmaker is also developing a modified Blackwell-series AI chip tailored for the Chinese market, which is expected to roll out later in 2025. Like the upcoming Hopper variant, the Blackwell chip will also exclude HBM to stay within the limits set by U.S. export regulations.

These new chips highlight Nvidia's strategy to maintain its foothold in China amid tightening U.S. export curbs targeting advanced AI technologies. Previously, the H20 chip was Nvidia’s top-selling product in China, widely adopted by leading AI firms such as Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), ByteDance, and DeepSeek.

However, U.S. sanctions and rising domestic competition from Chinese chipmakers like Huawei are pressuring Nvidia’s market share. Despite these challenges, China still represented around 14% of Nvidia’s total revenue in 2024. CEO Jensen Huang recently projected that the Chinese AI chip market could reach $50 billion, underlining the company’s incentive to stay active in the region.

By adapting its product line to meet regulatory constraints while serving growing demand, Nvidia aims to retain relevance in the world's second-largest economy, even as geopolitical tensions continue to reshape the global semiconductor landscape.