Nvidia to Launch Cheaper AI Chip for China, Reuters Reports
Nvidia to Launch Cheaper AI Chip for China, Reuters Reports
Nvidia is poised to introduce a new, lower-cost artificial intelligence chipset tailored for the Chinese market, a move driven by tightening U.S. export controls, according to an exclusive Reuters report by Liam Mo and Fanny Potkin. The chip, part of Nvidia’s advanced Blackwell architecture, aims to preserve the company’s presence in China’s $50 billion data center market, with mass production expected to begin in June. Priced between $6,500 and $8,000—significantly below the $10,000–$12,000 range of its now-restricted H20 chip—this development highlights Nvidia’s strategic response to a complex regulatory landscape, Reuters notes.
U.S. Export Curbs Reshape Nvidia’s China Strategy
Reuters reports that U.S. export restrictions, in place since 2022, have intensified, targeting high-performance semiconductors to curb China’s technological development. The H20 chip, designed to comply with earlier rules, was banned in April 2025, with new limits capping GPU memory bandwidth at 1.7–1.8 terabytes per second, compared to the H20’s 4 terabytes per second, according to Reuters’ sources.
The financial impact has been significant. Nvidia wrote off $5.5 billion in inventory due to the H20 ban, and CEO Jensen Huang estimated a $15 billion sales loss. “The company also had to walk away from $15 billion in sales,” Huang told the Stratechery podcast, as cited by Reuters. China, contributing 13% of Nvidia’s sales last year, has seen the company’s market share drop from 95% before 2022 to 50% today, with Huawei’s Ascend 910B chip gaining traction, Reuters reports.
Huang warned of further shifts, telling reporters in Taipei, “If U.S. export curbs continue, more Chinese customers will buy Huawei’s chips,” according to Reuters. This trend could alter China’s AI hardware market as Chinese firms ramp up domestic semiconductor development, the report suggests.
A Scaled-Back Chip to Meet Restrictions
The new chip, tentatively named the 6000D or B40 by Chinese brokerage GF Securities, is built on Nvidia’s Blackwell architecture but designed to meet U.S. restrictions, Reuters states. Unlike the H20’s high-bandwidth memory (HBM), it uses conventional GDDR7 memory, achieving a bandwidth of around 1.7 terabytes per second, just within regulatory limits. The chip also avoids Taiwan Semiconductor Manufacturing Co.’s advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging, opting for simpler processes to reduce costs, per two sources cited by Reuters.
Based on Nvidia’s RTX Pro 6000D server-class graphics processor, the chip uses GDDR7 memory and simpler processes, with GF Securities forecasting a bandwidth of approximately 1.7 terabytes per second, intended to comply with U.S. export control limits, Reuters notes. However, U.S. government approval remains pending, creating uncertainty. “Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 billion data center market,” an Nvidia spokesperson told Reuters.
Nvidia’s Third Attempt to Navigate Curbs
This marks Nvidia’s third effort to tailor a GPU for China, following the H800 and H20 chips, Reuters reports. Each iteration has demanded greater compromises, as the Hopper architecture underpinning the H20 reached its modification limits under U.S. rules. Huang stated last week that Hopper could no longer be adapted, prompting the shift to Blackwell, according to Reuters.
China’s market remains critical, accounting for 13% of Nvidia’s sales last year, Reuters emphasizes. Yet, Huawei’s growing presence, bolstered by export curbs, poses a challenge. According to a recent report from SemiAnalysis, cited by Investing.com, while Huawei’s chips trail Nvidia’s, they are advancing rapidly, positioning Huawei as a significant competitor.
Implications for Industry and Markets
The lower-cost chip aims to maintain Nvidia’s presence in China’s $50 billion data center market, though its price reflects its weaker specifications and simpler manufacturing requirements, Reuters suggests. The shift to simpler production processes, bypassing TSMC’s CoWoS packaging, reduces costs, per Reuters’ sources.
Huawei’s rise, fueled by U.S. restrictions, could reshape China’s semiconductor market, Reuters reports. “The export controls gave Chinese companies the spirit, the energy, and the government support to accelerate their development,” Huang said in Taipei, as quoted by Reuters. Continued curbs may drive Chinese customers to Huawei’s chips, potentially strengthening domestic competitors, Reuters reports.
Navigating an Uncertain Future
Nvidia is also developing another Blackwell-based chip for China, with production eyed for September, Reuters reveals. The company’s ability to innovate within U.S. constraints, pending government approval, will determine its future in China’s market, the report notes. The chip’s lower price of $6,500–$8,000, compared to the H20’s $10,000–$12,000, awaits U.S. approval to impact China’s market, according to Reuters.
Nvidia faces challenges as U.S. export controls limit its access to China’s market, Reuters concludes. Whether this latest effort succeeds will depend on securing U.S. government approval and finalizing the chip’s design, as outlined in the exclusive report.
More info here – Have a Story? Address it to the Editor and submit it here
Featured image Copyright EU-Images
Disclaimer
The information provided in this article is for general informational purposes only and from publicly available sources. While we strive for accuracy, we do not make any representations or warranties, express or implied, regarding the completeness, reliability, or validity of the content. This article does not make any direct claims about specific companies, individuals, or organizations. Any references to reports or external sources are for context and do not imply endorsement or verification of any specific allegations. Readers are encouraged to conduct their own research and seek professional advice before making business decisions. We disclaim any liability for any losses or damages incurred as a result of reliance on the information provided.