Nvidia developing China-specific AI chips amid US export ban

Nvidia has reportedly informed major Chinese clients, including Alibaba, ByteDance, and Tencent, that it is redesigning its AI chips to comply with U.S. export restrictions, allowing the chips to be sold without violating regulations

Nvidia, the global leader in graphics processing units (GPUs), is working on modifications to its artificial intelligence (AI) chips to comply with U.S. export regulations and continue serving its Chinese customers. According to reports, Nvidia has informed some of its largest Chinese clients, such as Alibaba Group, ByteDance (the parent company of TikTok), and Tencent Holdings, that it is adjusting the design of its AI chips to meet U.S. export restrictions.

This decision follows the U.S. government's imposition of new export controls that restrict the sale of Nvidia’s H200 AI chips to China, which could potentially cost the company up to $5.5 billion in revenue. The export curbs, which target the most advanced AI chips, are part of a broader strategy by the U.S. to prevent China from gaining access to cutting-edge technologies critical to its AI development.

Geopolitical tensions shape Nvidia’s strategy

Nvidia CEO Jensen Huang informed clients about the changes during his visit to Beijing in mid-April. The company’s plan involves creating a China-specific version of its latest Blackwell AI chip, designed to stay within the limits set by U.S. regulations. A sample of the modified chip is expected to be available by June.

The move highlights the growing geopolitical tensions over AI technology and the global race to lead in the sector. The restriction on AI chip exports to China has created challenges for Nvidia, as China is an essential market for the company’s products. The company is now working to strike a balance between meeting market demand in China and complying with U.S. national security concerns.

Nvidia declined to comment on the reports, and the Chinese companies involved, along with the U.S. Commerce Department, have not provided official responses.