Nvidia is developing a version of its latest flagship AI chips specifically designed for the Chinese market, ensuring compliance with current U.S. export regulations, as confirmed by multiple well-informed sources.
In March, the prominent AI chip manufacturer unveiled its “Blackwell”
chip series, scheduled for mass production later this year. These innovative
processors integrate two silicon squares, significantly larger than the
company's previous offerings. Notably, the B200 model within the series
exhibits exceptional speed, outperforming its predecessor by 30 times in
certain tasks, such as generating responses from chatbots.
Nvidia, in collaboration with Inspur, a prominent
distribution partner in China, is preparing for the launch and distribution of
a new chip, tentatively named “B20”. The projected commencement of shipments
for the “B20” is the second quarter of 2025, as confirmed by a separate source.
The sources declined to be identified as Nvidia has yet to
make a public announcement.
Nvidia’s representative chose not to comment. Inspur has not
responded to requests for comment.
Shares of Nvidia rose 1.4% to $119.67 in U.S. premarket
trading after publication of the Reuters story.
Washington tightened its controls on exports of cutting-edge
semiconductors to China in 2023, seeking to prevent breakthroughs in
supercomputing that would aid China's military.
Since then, Nvidia has developed three chips tailored
specifically for the Chinese market.
The advent of tighter export U.S. controls has helped
Chinese technology giant Huawei and startups like Tencent-backed Enflame make
some inroads into the domestic market for advanced AI processors.
A version of a chip from Nvidia's Blackwell series for the
Chinese market would boost the U.S. firm's efforts to fend off those
challenges.
China accounted for around 17% of Nvidia's revenue in the
year to end-January in the wake of U.S. sanctions, sliding from 26% two years
earlier.
Nvidia's most advanced chip for the China market, the H20,
initially got off to a weak start when deliveries began this year and the U.S.
firm priced it below a rival chip from Huawei, Reuters reported in May.
But sales are now growing rapidly, two of the sources said.
Nvidia is on track to sell over 1 million of its H20 chips
in China this year, worth upwards of $12 billion, according to an estimate from
research group SemiAnalysis.
Expectations are high that the U.S. will continue to keep up
the pressure on semiconductor-related export controls.
The U.S. wants the Netherlands and Japan to further restrict
chipmaking equipment to China, sources have said.
The Biden administration also has preliminary plans to place
guardrails around the most advanced AI Models, the core software of artificial
intelligence systems like ChatGPT, sources have said.
Last week, there was a significant decline in the value of
chip stocks on a global scale. This was a direct result of a recent report
published by Bloomberg News, which revealed that the Biden administration is
considering the implementation of a new measure known as the foreign direct
product rule. If enacted, this rule would grant the United States the authority
to prohibit the sale of any product that has been manufactured using American
technology.