Summary: Nvidia is set to launch a new artificial intelligence chipset for China, with production expected as early as June. The GPU will be part of Nvidia's latest generation Blackwell-architecture AI processors and will be priced between $6,500 and $8,000, significantly lower than the restricted H20 model.

Nvidia Launches New AI Chipset for China Amid Export Restrictions

Nvidia has been facing significant challenges in the Chinese market due to export restrictions imposed by the US government. The company's GPU sales have plummeted from 95% market share before 2022 to 50% currently, with Huawei's Ascend 910B chip emerging as a major competitor. Despite these hurdles, Nvidia is pressing ahead with its plans to launch a new AI chipset for China.

According to sources familiar with the matter, the new GPU will be based on Nvidia's RTX Pro 6000D, a server-class graphics processor, and will use conventional GDDR7 memory instead of more advanced high-bandwidth memory (HBM). The chip's price, production timing, and specifications have not been previously reported. However, it is expected to be priced between $6,500 and $8,000, well below the $10,000-$12,000 range of the restricted H20 model.

The lower price reflects the weaker specifications and simpler manufacturing requirements of the new chip. It will not use Taiwan Semiconductor Manufacturing Co's advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging technology, which is used in more advanced chips like the H20. Nvidia's spokesperson said that the company is still evaluating its "limited" options due to export restrictions.

The US government has imposed significant restrictions on Nvidia's products, including the H20 chip, citing concerns over Chinese technological development. The new GPU will be part of Nvidia's efforts to stay competitive in the Chinese market despite these challenges. However, experts predict that domestic Chinese technologies like Huawei will catch up with the computing performance of downgraded versions within one to two years.

Nvidia's remaining edge lies primarily in its ability to integrate AI clusters with its CUDA platform, which is a programming architecture used by engineers to build their AI models and apps on Nvidia GPUs. The broad use and ecosystem built around it make developers keen to stick with Nvidia. However, Nicolas Gaudois, head of Asia technology research at UBS, said that a new GPU with conventional memory would be insufficient for some AI training and inference uses.

Nvidia's Market Share in China Plummets Amid Export Restrictions

Nvidia's market share in China has plummeted from 95% before 2022 to 50% currently due to export restrictions imposed by the US government. The company's CEO, Jensen Huang, warned that if US export curbs continue, more Chinese customers will buy Huawei's chips. According to two sources, Nvidia is also developing another Blackwell-architecture chip for China that is set to begin production as early as September.

The new GPU will be a crucial step in Nvidia's efforts to regain its market share in China. However, experts predict that domestic Chinese technologies like Huawei will catch up with the computing performance of downgraded versions within one to two years. The H20 ban forced Nvidia to write off $5.5 billion in inventory and Huang told the Stratechery podcast last week that the company also had to walk away from $15 billion in sales.

Export Restrictions: A Blow to Nvidia's Business

The US government has imposed significant restrictions on Nvidia's products, including the H20 chip, citing concerns over Chinese technological development. The new GPU will be part of Nvidia's efforts to stay competitive in the Chinese market despite these challenges. However, experts predict that domestic Chinese technologies like Huawei will catch up with the computing performance of downgraded versions within one to two years.

Nvidia's remaining edge lies primarily in its ability to integrate AI clusters with its CUDA platform, which is a programming architecture used by engineers to build their AI models and apps on Nvidia GPUs. The broad use and ecosystem built around it make developers keen to stick with Nvidia. However, Nicolas Gaudois, head of Asia technology research at UBS, said that a new GPU with conventional memory would be insufficient for some AI training and inference uses.

Experts Weigh in on Nvidia's New Chipset

Experts are divided on the impact of Nvidia's new chipset on its market share in China. Nori Chiou, an expert in semiconductors and investment director at Singapore-based White Oak Capital Partners, said that domestic Chinese technologies like Huawei will catch up with the computing performance of downgraded versions within one to two years.

However, Nicolas Gaudois, head of Asia technology research at UBS, said that a new GPU with conventional memory would be insufficient for some AI training and inference uses. Experts predict that Nvidia's remaining edge lies primarily in its ability to integrate AI clusters with its CUDA platform.

Conclusion

Nvidia is set to launch a new artificial intelligence chipset for China amid export restrictions imposed by the US government. The company's market share in China has plummeted from 95% before 2022 to 50% currently due to these restrictions. However, Nvidia is pressing ahead with its plans to stay competitive in the Chinese market despite these challenges.

The new GPU will be part of Nvidia's efforts to regain its market share in China. Experts predict that domestic Chinese technologies like Huawei will catch up with the computing performance of downgraded versions within one to two years. However, Nvidia's remaining edge lies primarily in its ability to integrate AI clusters with its CUDA platform.

Nvidia's new chipset is expected to be priced between $6,500 and $8,000, well below the $10,000-$12,000 range of the restricted H20 model. The lower price reflects the weaker specifications and simpler manufacturing requirements of the new chip. However, experts predict that Nvidia will continue to face significant challenges in the Chinese market due to export restrictions.

The company's remaining edge lies primarily in its ability to integrate AI clusters with its CUDA platform, which is a programming architecture used by engineers to build their AI models and apps on Nvidia GPUs. The broad use and ecosystem built around it make developers keen to stick with Nvidia.