Nvidia Prepares New China-Specific AI Chip To Defend Market Share
News Summary
Nvidia is developing two new China-specific AI chips to navigate U.S. export controls and defend its market share in the region. One is the B30A, based on the latest Blackwell architecture, offering about half the raw computing power of the flagship B300 but more potent than the H20 currently allowed in China. The other is the RTX6000D, tuned for AI inference, with bandwidth capped below new U.S. limits, scheduled for September delivery. Despite China accounting for 13% of Nvidia's fiscal 2024 revenue and strong demand for H20 after its sales ban was lifted, analysts remain divided on Nvidia's outlook in China. Bernstein warns that U.S. export controls and the rise of local players like Huawei could shrink Nvidia's market share. In contrast, Needham is bullish on H20 shipments and future Blackwell GPU variants' sales in China. Additionally, Nvidia and AMD have agreed to remit 15% of their advanced chip sales revenue from China to the U.S. government.
Background
Nvidia's revenue from the Chinese market accounted for 13% of its fiscal 2024 revenue, but its sales in China are subject to strict U.S. export control policies. Previously, the U.S. government abruptly banned Nvidia from selling advanced chips to China in April 2024, before re-permitting sales of its H20 model chips in July. Incumbent U.S. President Donald Trump announced in 2025 that his administration might allow Nvidia to sell advanced chips in China with 30% to 50% reductions in computing power. Local Chinese AI chip manufacturers like Huawei are emerging, posing competition to Nvidia's market share. Furthermore, Nvidia and AMD have agreed to hand over 15% of their revenue from advanced chip sales in China to the U.S. government.
In-Depth AI Insights
What is the true strategic intent behind Nvidia's persistent efforts in the Chinese market? - Nvidia's core objective is not merely short-term revenue but to maintain its dominant position in the global AI chip ecosystem, even if it means compromises and profit-sharing. The vast Chinese market, with its significant data center, cloud computing, and AI application demands, is an indispensable testing ground and growth engine for AI technology development. - By offering customized chips, Nvidia aims to maintain technological ties and market stickiness with Chinese customers, preventing China from fully shifting to local alternatives, which would long-term erode its global R&D feedback and ecosystem advantages. - Nvidia might also hope to influence future U.S. government policy through this "indirect" strategy, demonstrating that under controlled conditions, American companies can still profit from the Chinese market and, to some extent, slow down China's technological self-sufficiency process. What is the deeper meaning behind the U.S. government's requirement for Nvidia and AMD to remit 15% of their advanced chip sales revenue from China? - This is not merely a tax or penalty but a new form of "technological sovereignty" and "strategic resource" acquisition mechanism. The U.S. government may view this as a "rent" or "licensing fee" for its technological advantage, ensuring that even if technology flows into China, the U.S. gains direct economic and strategic returns. - This move also sends a signal to other U.S. high-tech companies: in sensitive technology areas, profits from overseas market expansion are not entirely the company's own; national interests may demand a portion of the proceeds "flow back" to support domestic R&D or other strategic objectives. - This could set a dangerous precedent for future U.S. government actions in other critical technology sectors, such as biotechnology and quantum computing, to impose similar conditions on sales to specific overseas markets, increasing operational complexity and uncertainty for multinational tech companies. How will Nvidia's long-term market share defense strategy evolve amidst the rise of indigenous Chinese AI chips? - While Nvidia still holds a technological lead, China's policy support and technical investment in "domestic substitution" are long-term and resolute. Nvidia's "customized chip" strategy aims to buy time and provide a buffer but cannot fundamentally prevent the maturation of China's domestic supply chain. - In the future, a decline in Nvidia's market share in China is highly probable, but its profit margins may be sustained through sales of high-end, differentiated products and continuous technological iteration. Competition will shift from "general-purpose chips" to "optimization for specific application scenarios" and "ecosystem services." - Nvidia may need to engage more deeply in the localization of China's AI ecosystem, and even consider deeper collaboration with local Chinese companies in non-sensitive areas, to maintain its presence in specific niches and benefit from China's vast AI application innovation.