On-record statement by Nvidia's CEO indicates that the chip successor to H20, not originating from the Hopper series, is bound for China.
China's Market, A New Challenge for Nvidia
After the U.S. government slapped restrictions on sales of Nvidia's Hopper H20 chip in China, the tech titan is evaluating a new approach for the spice market. The CEO, Jensen Huang, confirmed that the company won't be releasing another Hopper-series chip for China, as it's impossible to tweak the Hopper anymore, according to a livestream from Taiwan's Formosa TV News network.
Nvidia has consistently acknowledged China's pivotal role in its growth, and Huang made a hurried trip to China post-restrictions, when the U.S. stopped China-bound shipments of their H20 chips, the only AI chip Nvidia can legally sell in China.
Contrary to earlier reports that Nvidia plans to put out a watered-down version of the H20 chip for China to maintain sales, Huang clarified that it wouldn't be Hopper. Instead, they're cooking up an alternative. Within the next two months, a revised H20 version will hit the shelves, aiming to keep Nvidia in the game against domestic rivals like Huawei who've been nibbling at its market share.
The U.S. Framework for Artificial Intelligence Diffusion, issued in January, aimed to hinder AI chip exports to most countries, including China.
Setting Up Shop in Shanghai
During the same visit, Huang also argued that previous AI export regulations were off the mark and should have been geared towards maximizing U.S. technology's global impact.Donald Trump, for one, has pledged to abolish the AI diffusion rules introduced by the Biden administration.
Meanwhile, China generated a whopping $17 billion in revenue for Nvidia in the fiscal year ending January 26, equating to 13% of their total sales. In a bid to understand Chinese client needs and ensure technical specifications align with U.S. export controls, Nvidia is setting up shop in Shanghai, complete with a new research and development center. However, GPU design and manufacturing will remain outside China, and no core GPU intellectual property designs will be sender to, or tampered with, in China.
All in all, Nvidia's game plan post-Hopper H20 for China is:
- No new Hopper-series chips for China due to U.S. export restrictions.
- Launch a downgraded version of the Hopper H20 chip to comply with export controls and compete locally.
- Increase R&D presence in China to tailor to market needs while keeping sensitive designs outside China.
This tactic reflects Nvidia's attempt to negotiate complex U.S. regulatory hurdles while sustaining growth in the Chinese AI chip market.
- In response to the U.S. export restrictions on its Hopper H20 chip in China, Nvidia is planning to launch a downgraded version of the Hopper H20 to maintain its market presence, while adhering to the regulations.
- To better understand Chinese client needs and align technical specifications with U.S. export controls, Nvidia is establishing a new research and development center in Shanghai, simultaneously increasing its R&D presence in the country.
