Nvidia is reportedly preparing to roll out a new, lower-cost artificial intelligence chip tailored for the Chinese market as it navigates tightened U.S. export restrictions on its high-end models.
According to a May 26 report by Reuters, mass production of the upcoming chip is slated to begin in June. The chip will belong to Nvidia’s latest AI generation but will feature scaled-back specifications to comply with U.S. export regulations, particularly the bandwidth cap of 1.7 terabytes per second.
Priced between $6,500 and $8,000, the new model comes in significantly cheaper than the restricted H20 chips, which sold for as much as $12,000. The move reflects Nvidia’s effort to maintain a foothold in China’s $50 billion data centre market, which remains critical to its global operations.
Still, the company’s options remain limited.
“Until we settle on a new product design and receive approval from the US government, we are effectively foreclosed from China’s $50 billion data center market,”
an Nvidia spokesperson told Reuters.
U.S. authorities have increasingly clamped down on high-end chip exports, citing concerns that advanced AI chips could be repurposed for use in Chinese supercomputers. In April, the Biden administration tightened restrictions by mandating export licenses for Nvidia’s H20 chips, halting their flow into China.
The result has significantly affected Nvidia’s market share in the region. CEO Jensen Huang recently noted in a Taiwanese TV interview that its Chinese market share has dropped from 95% before 2022 to around 50% today. Nonetheless, he affirmed that Nvidia remains committed to optimizing its offerings within regulatory limits to continue serving Chinese clients.
The company also faces rising domestic competition. Chinese tech giant Huawei is reportedly preparing to ship a new AI chip—dubbed the Ascend 910D—as part of its broader strategy to challenge Nvidia’s dominance.
This development comes just days before Nvidia releases its quarterly earnings on May 28. Analysts forecast a 66% year-over-year revenue surge to $43.4 billion, with adjusted net income projected at $21.3 billion, according to data from Investopedia.
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