Nvidia working on new AI chip for China that outperforms the H20, Reuters reports

Nvidia is developing a new, more powerful AI chip for China, the B30A based on its Blackwell architecture, with samples expected next month. This initiative comes despite significant U.S. regulatory uncertainty and Washington's deep-seated fears regarding China's access to advanced AI technology, even as Donald Trump recently indicated potential openness to such sales. The move is crucial for Nvidia to retain its 13% revenue share from China and compete against rivals like Huawei, while navigating complex U.S. export controls and recent security allegations from Chinese state media. Concurrently, Nvidia is also preparing to deliver the RTX6000D, another China-specific inference chip designed to comply with U.S. thresholds.

Analysis

Nvidia is actively developing two new AI chips specifically for the Chinese market to navigate stringent U.S. export controls and defend its market share, which constituted 13% of its revenue last fiscal year. The primary offering, tentatively named B30A and based on the new Blackwell architecture, is designed to be more powerful than the current H20 model but will feature a single-die design with approximately half the raw compute power of the flagship B300. This initiative is fraught with significant regulatory risk, as U.S. approval remains uncertain despite recent conditional comments from President Trump. Compounding this challenge, Nvidia faces increasing competition from domestic rivals like Huawei and must contend with fresh security allegations from Chinese state media that could deter local buyers. Concurrently, Nvidia is preparing a lower-specification inference chip, the RTX6000D, engineered to fall just below U.S. export thresholds with a memory bandwidth of 1,398 GB/s. This dual-product strategy highlights Nvidia's attempt to retain a foothold in a critical market by creating a tiered, compliance-focused portfolio, though its success is heavily contingent on the volatile U.S.-Sino geopolitical landscape and Chinese domestic market sentiment.

Key Decisions for Investors

• Investors should treat Nvidia's China revenue as highly volatile and closely monitor communications from the U.S. Department of Commerce, as abrupt regulatory changes represent the primary risk to this segment.
• Consider the development of the B30A and RTX6000D as defensive maneuvers to mitigate market share loss to competitors like Huawei, rather than a new avenue for high-margin growth, given the chips' scaled-down specifications.
• Pay close attention to adoption rates and any official guidance from Chinese authorities regarding Nvidia's products, as recent state media allegations could signal a political headwind impacting future sales within China, independent of U.S. restrictions.