Nvidia is reportedly developing a new AI chip tailored for the Chinese market to comply with U.S. export controls.
What Happened
According to sources, Nvidia, led by CEO Jensen Huang, is collaborating with Inspur, a major Chinese distributor, to introduce a new chip tentatively named “B20.” This chip, part of Nvidia’s “Blackwell” series unveiled in March, is expected to enter mass production later this year, Reuters reported on Monday. Notably, the B200 chip in the series is said to be 30 times faster than its predecessor in certain tasks.
This initiative comes in response to tightened U.S. semiconductor export controls to China, enacted in 2023. Since these restrictions, Nvidia has designed three chips specifically for the Chinese market. The new chip aims to strengthen Nvidia’s position against competitors like Huawei and the Tencent-backed startup Enflame.
China accounted for approximately 17% of Nvidia’s revenue in the fiscal year ending January, down from 26% two years earlier due to U.S. sanctions. Despite this, Nvidia’s latest advanced chip for China, the H20, is projected to sell over one million units this year, generating more than $12 billion, according to research firm SemiAnalysis.
The U.S. is expected to maintain stringent export controls on advanced AI models and semiconductor-related technologies. Nvidia has declined to comment on these developments.
Why It Matters
This move follows reports that Google and Microsoft are circumventing U.S. restrictions by providing Chinese companies access to Nvidia AI chips through data centers outside China. This workaround helps Chinese firms access advanced U.S. technology despite the Biden administration’s restrictions aimed at limiting China’s use of American AI and semiconductor technologies.
In July, Nvidia was on track to sell $12 billion worth of AI chips in China this year, despite the export controls. In May, the Chinese government urged its tech giants to reduce dependence on foreign-made chips, particularly those from Nvidia, and to increase purchases of domestically produced AI chips.
This ongoing technological tug-of-war underscores the complex dynamics of global tech supply chains and geopolitical influences on the semiconductor industry.
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