Nvidia to ship new AI processor to China and open Shanghai center
Nvidia is set to deliver a new artificial intelligence (AI) chip tailored for the Chinese market in the upcoming months, as it aims to maintain its market presence in light of stricter US export regulations and increasing competition from Chinese competitors such as Huawei, according to Nikkei Asia. AI chips exported to China will incorporate GDDR7 instead of HBM. The latest chip, built on Nvidia’s Hopper architecture, has undergone additional downgrades to adhere to Washington’s regulations. High-bandwidth memory (HBM), which is essential for high-performance AI computing, will not be included. Instead, it will feature GDDR7 memory, a slower but export-compliant alternative. Nvidia is additionally developing a GDDR7-based iteration of its forthcoming Blackwell chip intended for the Chinese market. Both chips seek to remain beneath US thresholds that would activate further licensing obligations.
The United States has implemented stricter regulations on the export of AI chips. Nvidia has encountered escalating limitations since 2022, when the US government initially instituted restrictions on the export of advanced AI chips. In April 2025, regulations were further tightened to encompass chips with bandwidth akin to Nvidia’s H20 – a product that had been launched earlier to address the preceding wave of restrictions. The company now anticipates a $5.5 billion impact on its Q1 earnings as a result of the new regulations. CEO Jensen Huang had previously stated that additional changes to the Hopper line were “not possible.” Nonetheless, Nikkei Asia indicates that a compliant version of the chip is set to be shipped shortly.
Notwithstanding the downgrade, the new chip is anticipated to maintain its competitiveness in China’s rapidly expanding AI market, the report noted. Huawei steps in to occupy the space left by Nvidia’s withdrawal. As Nvidia’s position weakens, Huawei is stepping up. The adoption of its Ascend AI chips is on the rise among Chinese AI firms, such as iFlytek and SenseTime. “Nvidia is being boxed out of a rapidly growing market,” a company spokesperson informed Nikkei Asia. “Huawei and other Chinese firms are now shielded from US competition and are leveraging that advantage to compete globally.”
During the Milken Conference earlier this month, Huang forecasted that China’s AI chip market would attain a value of $50 billion in the forthcoming years. Nvidia is contemplating the establishment of a research and development centre in Shanghai to maintain its competitive position, as reported by the Wall Street Journal. The proposed facility aims to bolster compliance initiatives and facilitate the creation of products specifically adapted to local needs. Nvidia is said to be seeking to lease space for the new hub and expand its workforce. According to the report, local officials have provided tax incentives and regulatory assistance to entice Nvidia’s investment.
