Nvidia to Release Downgraded Blackwell AI Chip for China's Market

Nvidia plans to release a modified AI chip for China's market in June, priced between $6,500 and $8,000. The chip, based on the Blackwell architecture, offers less advanced features due to US export limitations. This move aims to maintain Nvidia's presence in China's data center sector, estimated at $50 billion, amid regulatory compliance challenges.

Nvidia, the leading AI chipmaker, is set to release a modified AI chip for China's market in June, priced between $6,500 and $8,000. This move comes as a strategic response to U.S. export limitations, which have significantly impacted Nvidia's operations in China [1].

The new chip, based on the Blackwell architecture, will be a more affordable alternative to the previously restricted H20 model. The H20, which sold for $10,000-$12,000, was banned due to U.S. export restrictions. The new chip will use conventional GDDR7 memory and not require Taiwan Semiconductor Manufacturing Co.'s (TSMC) advanced packaging technology [1].

The lower price reflects the chip's simpler manufacturing requirements and weaker specifications. It is expected to achieve approximately 1.7 terabytes per second using GDDR7 memory technology, just within the export control limits [1]. This move aims to maintain Nvidia's presence in China's data center sector, estimated at $50 billion, amid regulatory compliance challenges.

Nvidia's market share in China has plummeted from 95% before 2022 to 50% currently, as competitors like Huawei have gained traction. The new chip is part of Nvidia's broader strategy to navigate the complexities of the Chinese market and comply with U.S. export restrictions [1].

Nvidia is also developing another Blackwell-architecture chip for China, set to begin production as early as September. This chip is expected to be more advanced than the June release but will still be subject to export control limits [1].

Nvidia's financial outlook for the first quarter of 2025 is expected to be strong, with earnings estimates likely to be exceeded. However, the outlook may be tempered by weakness in China, where the company has faced significant challenges due to export restrictions [3].

References:
[1] https://www.reuters.com/world/china/nvidia-launch-cheaper-blackwell-ai-chip-china-after-us-export-curbs-sources-say-2025-05-24/
[2] https://www.communicationstoday.co.in/oracle-to-buy-40b-of-nvidia-chips-for-openais-us-data-center/
[3] https://finance.yahoo.com/news/nvidia-faces-china-pressure-ahead-181918143.html