Nvidia is aiming to release a downgraded version of its H20 chip for China in July, after the original model – itself initially developed for the Chinese market – fell afoul of new US export regulations, Reuters reported.
Nvidia has formulated new technical thresholds to guide the development of the new chip that will involve significant downgrades from the original H20, including substantially reduced memory capacity, the report said, citing three sources familiar with the matter.
Downstream customers may be able to modify the module configuration to adjust the chip’s performance levels, one of the sources said.
Downgrade
Nvidia has notified major Chinese customers, including leading cloud computing service providers, of the expected July release date, according to Reuters.
Last week The Information reported that Nvidia was adjusting the design of the H20 and had notified customers including Alibaba Group, TikTok-parent ByteDance and Tencent Holdings that the modified chip could be released as soon as June.
Nvidia chief executive Jensen Huang reportedly informed customers of the company’s plans during a recent trip to Beijing, which came days after punitive tariffs announced by the White House.
China is a critical market for Nvidia, accounting for 13 percent of its total sales, or $17bn, in the fiscal year ended 26 January.
The company is still working on a China-specific version of its latest-generation AI chip, Blackwell, according to The Information.
The US under the previous administration had already targeted China with two rounds of export controls in October 2022 and October 2023 that specifically limited the parameters of AI chips that US firms such as Nvidia could sell to Chinese buyers, forcing Nvidia to develop slower AI chips for the Chinese market.
Nvidia said it would take $5.5 billion (£4.1bn) in charges after the US government limited exports of its H20 artificial intelligence chip to China.
Domestic competition
Since 2023 there have been reports that Huawei, Tencent and other Chinese start-ups were increasingly seeking Nvidia alternatives.
Last month it was reported that Huawei Technologies is set to begin testing its next-generation Ascend 910D chip, which it sees as a challenger to Nvidia’s H100.
Nvidia recently criticised US AI start-up Anthropic over its stance on US export controls on advanced AI chips to China.
Anthropic had argued in a blog post that strong export controls on AI chips are crucial to maintaining the US advantage in the global AI race and safeguarding national security, and claimed that Chinese smugglers have come up with creative methods to circumvent export controls including hiding chips in “prosthetic baby bumps” and packing them “alongside live lobsters”.
Nvidia dismissed some of Anthropic’s anecdotes as “tall tales”.