Nvidia’s Blackwell-Based AI Chip Targets Chinese Market Under U.S. Compliance

According to Reuters, Nvidia is set to introduce a new AI chip for China designed to circumvent U.S. export restrictions on high-performance GPUs, citing sources familiar with the matter. Mass production is scheduled for June, with pricing between $6,500 and $8,000 — considerably lower than the H20’s $10,000–$12,000 range. The decision aligns with Nvidia’s effort to reclaim market share in China, which fell to 50% after the first export controls were implemented in 2022.

Nvidia’s New Export-Friendly Chip

The GPU runs on Blackwell and uses GDDR7 instead of HBM — a move that keeps costs down and stays within U.S. bandwidth caps. It’s Nvidia’s third shot at an export-compliant chip. Earlier Hopper-based attempts didn’t work out due to tech constraints.

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Unlike the H20, Nvidia’s new AI chip won’t use TSMC’s CoWoS packaging. Reuters reports that this decision simplifies the manufacturing process and lowers chip complexity, helping Nvidia stay on track for mass production in June. Another Blackwell-based chip for China is in the pipeline, with a release expected in September.

Regulatory Barriers and Market Contraction

The U.S. government notified Nvidia in April that exporting the H20 chip to China would require a license, citing concerns it could be used in supercomputing systems.

Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China's $50 billion data center market,

said an Nvidia representative.

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Nvidia CEO Jensen Huang noted that the company’s market share in China has declined sharply — from 95% to 50% — since the first wave of restrictions in 2022.

We will continue to make tremendous efforts to optimize compliant products and continue serving the Chinese market,

Huang said in a televised interview in Taiwan.

Market Competition and Analyst Outlook

Huawei is ramping up its presence in AI with the upcoming Ascend 910D chip, emerging as Nvidia’s top competitor in China. «Domestic Chinese technologies like Huawei are expected to catch up with the computing performance of downgraded versions within one to two years».

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Even with the H20 off the Chinese table, analysts at Oppenheimer remain bullish on Nvidia: “We see upside … despite the loss of H20 sales to China.” On May 28, Nvidia will announce its next earnings report. Projections stand at $43.4 billion in revenue and $21.3 billion in adjusted net profit — up 66% from the same quarter last year.