Exclusive: Nvidia working on new AI chip for China that outperforms the H20, sources say

Nvidia is reportedly developing a new AI chip for China, the B30A, based on its advanced Blackwell architecture, designed to be more powerful than the current H20 while adhering to U.S. export controls via a single-die configuration. This initiative aims to preserve Nvidia's substantial revenue from China amid ongoing U.S.-Sino trade tensions and strict regulatory scrutiny, despite recent political signals suggesting potential leniency on scaled-down advanced chip sales.

Analysis

Nvidia is proactively navigating stringent U.S. export controls by developing two new AI chips specifically for the Chinese market, a region that constituted 13% of its revenue last fiscal year. The primary offering, tentatively named B30A, is based on the advanced Blackwell architecture and is designed to be more powerful than the current H20 chip, utilizing a single-die design to deliver approximately half the raw power of the flagship B300. This technical specification is a strategic attempt to comply with U.S. regulations while retaining a competitive edge. However, the article underscores that U.S. regulatory approval is highly uncertain due to geopolitical tensions. This strategy is also a defensive maneuver against rising competition from firms like Huawei, aiming to prevent a complete migration of Chinese developers to rival ecosystems. The situation is further complicated by recent political developments, including a proposal for a 15% revenue-sharing deal on China sales, which introduces another layer of unpredictability. A second, lower-specification chip, the RTX6000D, is also being prepared with features designed to fall just below established export control thresholds, indicating a multi-tiered approach to preserving market share under a complex and fluid regulatory environment.

Key Decisions for Investors

• Investors should closely monitor communications from the U.S. Department of Commerce, as the approval or rejection of the new B30A chip is the single most critical catalyst for Nvidia's China-related revenue.
• The competitive positioning against Huawei is paramount; watch for market reception and adoption rates of the new China-specific chips by major Chinese cloud and tech firms upon their potential release.
• Evaluate the potential impact of the proposed 15% revenue-sharing deal on margins from China sales, as this could materially alter the profitability of this segment even if sales are permitted.
• Given the high regulatory uncertainty and mixed sentiment, consider this a high-risk, high-reward situation where portfolio exposure should be managed in line with updates on U.S.-Sino trade policy.