Nvidia is reportedly developing a new scaled-down version of its flagship AI chip for China

Nvidia is developing a new version of its flagship AI chips for the Chinese market. This is an effort from the chipmaker to comply with the current US export control regulations.

Nvidia has developed a chip called B20 for the Chinese market. The chipmaker will also work on its launch and distribution process with its partner, Inspur, in China. Sources familiar with the development said these chips are a trimmed-down version of the Blackwell B200 chips, according to a report by Reuters. Nvidia debuted its “Blackwell” chips in March, and they are set for mass production around the year’s fourth quarter.

B20 accelerator will help Nvidia regain its share in the Chinese market

Nvidia’s new Blackwell AI accelerators (B200) are 30 times faster than its previous version at performing some tasks, such as computing answers for chatbots. However, due to export control restrictions, the company has been said to have developed three new variants since then, specifically for Chinese buyers.

Also read: Nvidia to sell AI chips worth $12B in China

The latest one (B20) is also one of them, as the company is trying to counter the restrictions, according to sources who declined to be identified. This is because Nvidia has not yet made an official announcement, said the report.

Washington started tightening rules on the supply of advanced semiconductors to China in 2023 and has recently ramped up its efforts by expanding export controls to chip-making equipment. The US is doing so to limit Beijing’s advancement in artificial intelligence that would aid its military.

At the same time, tighter US controls have allowed the Chinese tech powerhouses Huawei and Enflame to gain more share of their domestic market. Enflame produces silicon chips and computer hardware and is also backed by Tencent.

The new chip variant B20 from Nvidia’s Blackwell series will also help the US-based company to address these challenges and recapture its losing market share in mainland China.

Nvidia sales in China are increasing

Nvidia generated 17% of its sales from China in the fiscal year that ended in January 2024. This is less than 26% of sales generated from China two years earlier due to the sanctions. This year, H20 was Nvidia’s most advanced chip for China, but sales were weaker at the start. The company also had to price them 10% cheaper than the ones from Huawei. 

Also read: US proposes new rule to curb AI investments in China

Even the Chinese chip was said to be more powerful in performance according to some standard benchmarks. However, the sales are now increasing at a good rate according to two sources, noted the report.

Nvidia expects to sell more than 1 million of its H20 accelerators in China in 2024. SemiAnalysis, a research group, has estimated Nvidia’s China sales to be upwards of $12 billion.

The market expects the US to continue increasing pressure on semiconductor exports to China. The US recently discussed restrictions on chip-making equipment for China. The US also wants Japan and the Netherlands to comply, as their firms, Tokyo Electron and ASML, make some of the most advanced equipment needed to produce advanced semiconductors like extreme lithography systems. In failing to do so, the US is also considering invoking the Foreign Direct Product Rule (FDPR).