Sources say Nvidia is developing a special version of its new flagship AI chip for the Chinese market.
Four sources familiar with the matter have revealed that Nvidia is developing a version of its latest flagship AI chips specifically for the China market, ensuring compatibility with existing U.S. export controls.
In March, the AI chip giant announced its “Blackwell” chip line, which is set to go into mass production later this year. The new processors combine two squares of silicon that are the same size as the company’s previous offering. Within the series, the B200 is 30 times faster than its predecessor in some tasks, such as providing answers to chatbots.
Nvidia is working with Inspur, one of its largest distribution partners in China, to launch and supply the chip, tentatively called “B20,” two of the sources said. Deliveries of the “B20” are scheduled to begin in the second quarter of 2025, a separate source told Reuters.
The sources declined to be identified, as Nvidia has yet to make a public announcement.
An Nvidia spokesperson declined to comment. Inspur did not respond to requests for comment.
Shares of Nvidia rose 1.4% to $119.67 in pre-US trading after the Reuters story was published.
Washington tightened controls on exports of high-end semiconductors to China in 2023 in an effort to prevent breakthroughs in supercomputers that would help China’s military.
Since then, Nvidia has developed three chips specifically tailored for the Chinese market.
Tighter US export controls have helped Chinese tech giant Huawei and startups like Tencent-backed Enflame enter the domestic market for advanced artificial intelligence processors.
A version of the Nvidia Blackwell series core for the Chinese market would boost the US company’s efforts to combat these challenges.
China’s share of Nvidia’s turnover was about 17 percent in the year to the end of January as a result of sanctions imposed by the United States, down from 26 percent two years earlier.
Nvidia’s most advanced chip for the Chinese market, the H20, got off to a weak start when shipments began this year, with the U.S. company pricing it below a rival chip from Huawei, Reuters reported in May.
But sales are now growing rapidly, two of the sources said.
Nvidia plans to sell more than one million of its H20 chips in China this year, worth more than $12 billion, according to an estimate by research group SemiAnalysis.
Expectations are high that the US will continue to press for semiconductor-related export controls.
Sources have said the US wants the Netherlands and Japan to further restrict chip-making equipment to China.
Sources say the Biden administration also has preliminary plans to put guardrails around the most advanced AI models, which are the core software of AI systems like ChatGPT.
Chip stocks plunged globally last week after Bloomberg News reported that the Biden administration was weighing a measure called the Foreign Direct Product Rule that would allow the United States to block the sale of a product if it was made using American technology.
