Nvidia’s Plans to Launch AI Chip in China
Nvidia, the U.S. chipmaker, is preparing to start mass production of its H20 artificial intelligence (AI) chip for China in Q2 2024. The H20 chip is the most powerful among the three chips developed by Nvidia specifically for the Chinese market. However, the launch of the chip was delayed due to integration challenges faced by server manufacturers.
Production Volume and Prioritization
Sources familiar with the matter revealed that the initial production volume of the H20 chip would be limited, with Nvidia prioritizing orders from major customers. Chinese companies have been hesitant to purchase the downgraded version of the chip, leading them to explore domestic alternatives.
Nvidia’s Response: L20 and L2 Chips
In response to concerns and tighter restrictions on U.S. exports, Nvidia has plans to release two more chips, the L20 and L2. These chips will comply with the new regulations while incorporating Nvidia’s latest AI features. The computing power of these chips will be reduced to ensure compliance.
Adapting to U.S. AI Chip Ban Regulations
To maintain its market share in China after the U.S. ban on exporting AI chips, Nvidia introduced a modified version of an advanced gaming chip in December 2023. These chips are currently being relied upon by Nvidia in China.
Background: U.S. Ban on Exporting AI Chips to China
In October 2023, the U.S. Department of Commerce implemented restrictions on selling advanced AI chips to China. These measures aimed to address loopholes that emerged after previous restrictions were put in place in 2022. The export ban prevented Nvidia from shipping its A800 and H800 AI chips to China.
Hot Take: Nvidia’s Strategy in the Chinese Market
Nvidia’s decision to launch the H20 chip in China demonstrates its commitment to the Chinese market and its willingness to adapt to changing regulations. By developing chips that comply with restrictions while still incorporating advanced AI features, Nvidia aims to regain its position in China. The success of these new chips will be crucial for Nvidia as it faces competition from domestic alternatives and seeks to maintain its market share in the country.
By
By
By
By
By
By