The U.S. government is reportedly leaning towards imposing stricter trade regulations to hinder advanced chip technology from reaching China. In response, Nvidia, a leading chipmaker based in the U.S., is developing a new version of its advanced artificial intelligence (AI) chips to meet these regulations.
According to recent reports, Nvidia is creating a version of its Blackwell AI chips specifically for the Chinese market, dubbed the “B20.” This initiative involves collaboration with a local distribution firm, Inspur, to facilitate the launch and sale of these chips, which are anticipated to start shipping by the second quarter of 2025. Nvidia has not provided any official comments regarding this development.
Nvidia has already designed three chips to align with U.S. export controls, including the H20 model, which saw a price reduction due to lagging sales compared to domestic competitor Huawei. However, recent reports indicate that sales of the H20 chips are on the rise, with estimates suggesting that Nvidia may sell over one million H20 chips in China this year, which could amount to approximately $12 billion in revenue, outpacing Huawei’s projected sales for its Ascend 910B chip.
Concerns arise, however, as analysts from Jefferies warn that Nvidia’s H20 chips could fall under renewed U.S. trade restrictions. In October, during its annual review of semiconductor export controls, the U.S. may impose a ban on the H20 for sale to China. Potential avenues for this ban include specific product bans, revising the computing power cap, or restricting memory capacity.
The U.S. government might also broaden its export controls to encompass chips sold to other nations within the region, such as Malaysia, Indonesia, and Thailand, or even extend restrictions to Chinese companies operating overseas, although the latter would be more challenging to execute.
In essence, while the changing landscape of chip regulations poses challenges, Nvidia’s proactive measures to adapt and innovate show the company’s resilience and commitment to maintaining its market presence. The collaboration with local partners like Inspur could facilitate broader market access and keep Nvidia at the forefront of the AI chip industry, even amidst restrictive trade policies.
This situation serves as a reminder of the dynamic nature of international trade and technological competition, highlighting the ongoing need for companies to remain adaptable and responsive to regulatory environments.