Nvidia’s Next Move: Localized AI Chips for China Amid U.S. Trade Tensions

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As the United States considers implementing stricter trade restrictions to prevent advanced chip technology from reaching China, Nvidia, a key U.S.-based chip manufacturer, is reportedly developing a version of its new artificial intelligence chips to comply with these regulations.

Nvidia is said to be creating a localized version of its Blackwell AI chips for the Chinese market, with plans to collaborate with a local distributor, Inspur, to introduce and market the chip, tentatively named the “B20,” in China.

The B20 is anticipated to begin shipping by the second quarter of 2025, according to a source familiar with the situation. Nvidia has chosen not to comment on the matter.

The company already has three chips designed to meet U.S. export controls, including the H20, for which Nvidia has reduced prices amid weak demand to compete with domestic rival Huawei. However, sales of the H20 are reportedly increasing, with estimates indicating that Nvidia will sell over one million units of the H20 chip in China this year, amounting to approximately $12 billion, despite existing U.S. trade barriers. This figure is nearly double what Huawei expects to sell of its Ascend 910B chip, according to data from SemiAnalysis.

At the same time, Nvidia’s H20 chips could be affected by potential new U.S. trade regulations, according to analysts from Jefferies. They suggested that during the U.S.’s annual review of semiconductor export controls in October, it is highly probable that the sale of H20 chips to China will be prohibited. This ban could be enforced in three ways: through a product-specific ban, by reducing the computing power cap, or by imposing limits on memory capacity.

Additionally, U.S. export controls may be extended to cover chips distributed to other countries in the region, such as Malaysia, Indonesia, and Thailand, or to overseas Chinese companies, although analysts believe the latter would be more challenging to execute.

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