Nvidia is preparing to release a lower-performance version of its advanced Blackwell AI chip for the Chinese market in response to ongoing U.S. export restrictions, according to sources familiar with the matter.

The move follows Washington’s decision to tighten controls on the export of high-end semiconductors and AI chips to China, citing national security concerns. These restrictions have affected Nvidia’s ability to supply its most powerful products to Chinese customers.

Adjusting to U.S. Regulations

Sources told Reuters that the new chip, based on the Blackwell architecture, is designed to comply with U.S. export rules by limiting performance levels below the thresholds specified by the Bureau of Industry and Security (BIS).

While not as powerful as Nvidia’s flagship AI processors like the H100 or B100, the new chip is expected to offer competitive performance for AI model training, inference, and enterprise applications in China.

The product is reportedly being finalized and could be shipped to Chinese clients later this year, though Nvidia has not made any official announcements.

Maintaining Market Presence in China

China remains a significant market for Nvidia, accounting for billions of dollars in revenue. Although the company cannot export its highest-performance chips, the development of customized alternatives allows Nvidia to maintain relationships with Chinese firms amid escalating U.S.-China tech tensions.

“This is about finding a way to stay in the market without violating U.S. regulations,” said one source.

Impact of U.S. Export Controls

Since 2022, the U.S. government has imposed a series of restrictions aimed at limiting China’s access to advanced semiconductors and AI-related hardware, citing concerns over potential military applications and technology transfers.

The latest rules have forced Nvidia and other American chipmakers to rethink their strategies and adapt product lines for foreign markets under compliance standards.

Competitive Landscape in China

While Nvidia adjusts its offerings, Chinese tech companies—including Huawei and Biren Technology—are accelerating efforts to produce domestic AI chips as part of Beijing’s broader push for self-reliance in critical technologies.

Analysts say Nvidia’s modified Blackwell chip could help the company preserve a foothold in China’s AI market, but competition is expected to increase as local alternatives mature.

The new chip is part of Nvidia’s ongoing strategy to balance regulatory compliance with global demand, as the company continues to lead the AI hardware sector amid rising geopolitical pressures.

Source; Reuters