Nvidia Develops Affordable Blackwell AI Chips For China

Nvidia is developing customized Blackwell AI chips for the Chinese market and expects to begin mass production of the first models by June to sell them at a lower cost than similar graphics processing units (GPUs). The new AI chips are expected to be priced between $6,000 and $8,000.

According to an exclusive report by Reuters, the new GPUs will be cheaper than the H20 models, and specifically adapted for the Chinese market, in light of the U.S. government’s restrictions. Nvidia’s strategy to develop customized AI chips for the region was revealed last year, and now further details and progress have been confirmed.

Anonymous sources told the news agency that the tech giant is building the new AI chips based on its RTX Pro 6000D GPU, which includes GDDR7 memory, and not the most advanced memories they have developed.

The sources familiar with the matter also explained that Nvidia currently sells the H20 models for between $10,000 to $12,000 and expects to price the upcoming AI chips at around $6,000 to $8,000. The company has optimized manufacturing requirements to reduce cost by using less advanced technology, and excluding Taiwan Semiconductor Manufacturing Co.’s Chip-on-Wafer-on-Substrate (CoWoS) packaging.

“Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 billion data center market,” said a spokesperson from Nvidia to Reuters.

China represents 13% of Nvidia’s sales, as reported in the most recent report of the company’s financial year. The company expects to stay relevant in the Chinese market with the new affordable AI chips, while complying with the restrictions imposed by the U.S. government.

A few days ago, the company’s CEO, Jensen Huang, said at a news conference in Taipei that the strict regulations imposed by the U.S. to limit the influx of advanced technology to the region have backfired and are making Chinese companies stronger and less dependent on American products.

Huang described the export control measures as a “failure” and said they will try every strategy to keep selling chips in China.