Nvidia is developing a version of its flagship AI chips specifically tailored for the Chinese market. This initiative aims to ensure compliance with the current US regulations, according a recent report on Reuters.
To facilitate the distribution of the new AI chips in China, Nvidia is partnering with Inspur, one of its major distributors in the region. The new chip variant, tentatively named the “B20,” is expected to be launched and distributed with the help of Inspur. According to sources, shipments of the B20 are slated to begin in the second quarter of the coming year.
This collaboration is pivotal for Nvidia as it seeks to retain a strong foothold in the Chinese market, which remains a significant revenue stream despite US-imposed restrictions. The tightening of US export controls on advanced semiconductors to China, implemented last year, aims to curb technological advancements that could potentially bolster China’s military capabilities. In response to these restrictions, Nvidia has developed several GPUs specifically designed for the Chinese market, ensuring they comply with US regulations. By developing a chip specifically designed to comply with US export regulations, Nvidia aims to sidestep the restrictions themselves, as well as carve out a niche in the Chinese market. So far, China accounted for a substantial portion of Nvidia’s revenue, reaching 26% at its peak. However, due to US sanctions, this contribution has shrunk to 17% in the past two years.
The introduction of export controls has also provided an opportunity for Chinese companies like Huawei Technologies and Tencent Holdings-backed start-ups such as Enflame to gain traction in the domestic market for advanced AI processors. Nvidia’s initiative to develop a China-specific version of its Blackwell series aims to counter these competitive pressures. Nvidia’s most advanced chip for the Chinese market, the H20, initially faced a slow uptake when deliveries began earlier this year. However, recent reports indicate a significant increase in sales. Nvidia is projected to sell over 1 million H20 chips in China this year, generating revenues exceeding $12 billion, according to estimates from research group SemiAnalysis.
And speaking of Nvidia’s chips, Nvidia CEO Jensen Huang introduced the new Blackwell series of AI chips earlier this year, in March. The series, set for mass production later this year, features significant advancements in computational power and efficiency. The flagship chip, known as the B200, incorporates two silicon squares, each the size of its previous offering, and is reported to be 30 times faster in certain tasks, such as generating responses from chatbots.
