Nvidia’s AI Chip Tactics: How Compliance Could Shape China’s Market

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As the United States contemplates stronger trade measures to hinder the transfer of advanced chip technology to China, Nvidia, a prominent U.S.-based chip manufacturer, is reportedly developing a compliant version of its new artificial intelligence chips.

According to Reuters, Nvidia is crafting a variant of its Blackwell AI chips specifically for the Chinese market and is expected to partner with local distributor Inspur to introduce the chip, provisionally named the “B20,” in China. Sources indicate that the B20 is anticipated to begin shipping in the second quarter of 2025, although Nvidia has not provided any comments on the matter.

Nvidia has already created three chip models that adhere to U.S. export regulations, including the H20, which the company reduced in price to address sluggish sales and to better compete with domestically produced chips from Huawei. Reports suggest that sales of the H20 are now increasing, with projections indicating that Nvidia may sell over one million H20 chips in China this year, valued at approximately $12 billion, despite existing U.S. trade restrictions. This expected sales figure nearly doubles the sales forecast for Huawei’s Ascend 910B chip, according to industry data.

However, analysts from Jeffries warn that Nvidia’s H20 chips may face new risks under impending U.S. trade regulations. The annual assessment of semiconductor export controls by the U.S. is scheduled for October, and analysts predict that the H20 could be banned from being sold to China. Potential scenarios for a ban include a product-specific prohibition, an adjustment in the computing power ceiling, or limitations on memory capacity.

Furthermore, the U.S. may expand its export control measures to chips distributed in other regional countries, including Malaysia, Indonesia, and Thailand, or to overseas Chinese firms, although implementing such restrictions could prove more challenging, experts note.

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