Nvidia to ship new AI chip for China, plans to set up centre in Shanghai

Amid US curbs on chip exports, Nvidia seeks to retain foothold in China as competitors rush to fill AI chip vacuum

Nvidia is preparing to ship a new China-specific artificial intelligence (AI) chip in the coming months, as it seeks to retain market access amid tighter US export restrictions and rising competition from Chinese rivals like Huawei, Nikkei Asia reported.

 

AI chips exported to China to feature GDDR7, not HBM

The new chip, based on Nvidia’s Hopper architecture, has been further downgraded to comply with Washington’s rules. It will not include high-bandwidth memory (HBM), which is essential for high-performance AI computing. Instead, it will feature GDDR7 memory, a slower but export-compliant alternative.

 

Nvidia is also working on a GDDR7-based version of its next-generation Blackwell chip for China. Both chips aim to stay below US thresholds that would trigger additional licensing requirements.

 

US tightens AI chip export regulations

Nvidia has faced increasing restrictions since 2022, when the US government first imposed curbs on advanced AI chip exports. In April 2025, rules were tightened again to include chips with bandwidth comparable to Nvidia’s H20 – a product previously released to navigate the earlier wave of restrictions.

 

The company now expects a $5.5 billion hit to its Q1 earnings due to the new rules.

 

CEO Jensen Huang had initially said further modifications to the Hopper line were “not possible.” However, Nikkei Asia reports that a compliant version of the chip will be shipped soon.

 

Despite the downgrade, the new chip is expected to stay competitive in China’s fast-growing AI market, the report added. 

 

Huawei fills the gap as Nvidia retreats

As Nvidia’s position weakens, Huawei is stepping up. Its Ascend AI chips are increasingly being adopted by Chinese AI firms including iFlytek and SenseTime.

 

“Nvidia is being boxed out of a rapidly growing market,” a company spokesperson told Nikkei Asia. “Huawei and other Chinese firms are now shielded from US competition and are leveraging that advantage to compete globally.”

 

At the Milken Conference earlier this month, Huang projected that China’s AI chip market would reach $50 billion in the coming years. 

 

Shanghai R&D centre on the cards

To retain a foothold, Nvidia is considering opening a research and development centre in Shanghai, according to a Wall Street Journal report.

 

The planned facility would support compliance efforts and help design locally tailored products. Nvidia is reportedly looking to lease space for the new hub and add new hires.

 

Local officials have offered tax breaks and regulatory support to attract Nvidia’s investment, the report said.