26-5-2025 – Nvidia, a titan in the realm of artificial intelligence technology, is poised to unveil a new, cost-effective AI chip tailored for the Chinese market, navigating the stringent export controls imposed by the United States. This strategic move, set to enter mass production in June, aims to recapture a slice of China’s lucrative $50 billion data centre market, which accounted for 13% of Nvidia’s revenue in the last financial year.
The forthcoming chip, part of Nvidia’s latest AI generation, is designed to comply with US regulations, notably adhering to a bandwidth cap of 1.7 terabytes per second. Priced between $6,500 and $8,000, it offers a more affordable alternative to the restricted H20 model, which commanded $10,000 to $12,000. The lower cost reflects simpler manufacturing and reduced specifications, a pragmatic response to barriers that have curtailed Nvidia’s dominance in China, where its market share has dwindled from 95% before 2022 to 50% today, according to CEO Jensen Huang.
Speaking on Taiwanese television last week, Huang underscored Nvidia’s commitment to crafting compliant products to serve China, despite the challenges posed by US export restrictions. These measures, introduced in April, require export licences for Nvidia’s high-end H20 chips, citing concerns that such technology could be diverted to supercomputing applications in China. An Nvidia spokesperson told Reuters that the company is still assessing its limited options, noting that without US government approval for a new design, access to China’s vast market remains constrained.
This marks Nvidia’s third endeavour to create a China-compliant chip, as it faces stiff competition from Shenzhen-based Huawei, which is gearing up to launch its Ascend 910D AI chip. Meanwhile, anticipation builds for Nvidia’s quarterly earnings report, due on May 28, with analysts forecasting a robust $43.4 billion in revenue—a 66% surge year-on-year—and an adjusted net income of $21.3 billion. Despite a 3% dip in its stock price last week, ending a run of four consecutive weekly gains, Oppenheimer analysts remain optimistic, seeing potential for growth even amidst the loss of H20 sales in China.
