Nvidia builds a weaker AI chip for China — And avoids trouble with the U.S.?!

Nvidia is launching a new AI chip for the Chinese market that’s both cheaper and less powerful than its predecessor, the H20. The new chip is priced between $6,500 and $8,000—down from the H20’s $10,000 to $12,000—reflecting design changes made to comply with U.S. export restrictions. These rules ban the sale of high-performance chips to China due to concerns about their use in advanced AI applications.

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To stay within the legal limits, Nvidia downgraded the chip by using slower GDDR7 memory and simplifying its manufacturing. As a result, the chip can handle 1.7 terabytes of data per second, about half the bandwidth of the H20. Nvidia once held 95% of China’s AI chip market, but that has dropped to 50% since the export bans took effect. Chinese companies like Huawei are rapidly gaining ground. Nvidia’s strategy now is to maintain its presence in China with compliant, lower-performance chips—walking a fine line between U.S. policy and Chinese demand.