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[Text/Observer Network Qi Qian] On July 22, Reuters exclusively reported that four people familiar with the matter revealed that Nvidia is developing a new flagship AI chip for the Chinese market. The chip is based on the Blackwell series, the "strongest AI chip" launched by Nvidia in March this year, and will be compatible with the current US government's chip export controls to China. As soon as the report was released, Nvidia's stock price rose 1.4% to $119.67 in pre-market trading in the United States.

Two of the sources said that this "China-specific version" AI chip is tentatively named "B20", and Nvidia plans to cooperate with Inspur Information, one of its main distributors in China, to launch and distribute this chip.

Another source told Reuters that the "B20" chip is scheduled to start shipping in the second quarter of 2025.

However, Chinese server manufacturer Inspur Information responded to questions on the investor interaction platform on the evening of the 22nd, stating that the company is not currently conducting any business or cooperation related to "B20" and the news is not true.

According to US media reports, as early as October 2022, the US government had implemented a series of AI chip export restrictions, preventing US semiconductor giants such as Nvidia, AMD, and Intel from selling their most advanced AI chips in China, forcing these companies to find workarounds.

Previously, Nvidia had developed a custom chip series called the H20 for the Chinese market to comply with U.S. export regulations and began accepting pre-orders in February this year. Reuters reported in May that due to the significant reduction in performance and the high price, Chinese customers were not interested in buying, and Nvidia's H20 chips had a poor start when they began to be delivered to China.

But two sources said that H20 sales in China are growing rapidly. According to research firm SemiAnalysis, Nvidia is expected to sell more than 1 million H20 chips in China this year, with a value of more than $12 billion.

The Chinese market is very important to Nvidia, but due to various restrictions of US policies, the share of revenue from the Chinese market has declined.

On May 23, Nvidia released its first quarter financial report for fiscal year 2025 (the natural year ends in April this year) after the U.S. stock market closed. The financial report shows that Nvidia's sales to China accounted for 19% of its data center business revenue in fiscal year 2023, and this proportion dropped to 14% in fiscal year 2024. In the conference call, Nvidia management also expected that the Chinese market will be very competitive in the future.

"We have customers who deserve our respect, and we will do our best to serve every customer. Our business in China has indeed declined a lot compared to the past. Due to technological limitations, competition in China is now more intense. These are facts." Huang Renxun promised in a conference call that NVIDIA will continue to do its best to serve customers in the Chinese market and will do its best to do its best.

It is worth mentioning that with the November election approaching, the Biden administration is expected to continue to abuse state power to suppress Chinese companies. According to a Bloomberg report on July 17, the United States is pressuring companies in allies such as Japan and the Netherlands to further tighten restrictions on chip exports to China.

However, Bloomberg pointed out at the time that the Biden administration was in an awkward situation: on the one hand, U.S. semiconductor companies were opposed to the current trade policy toward China, believing that it was counterproductive and undermined the interests of U.S. companies; at the same time, with only a few months left before the election, U.S. allies believed that there was no need to change the policy. This just shows that the U.S. efforts to unite its allies to form a "united front against China chips" have failed.

On July 17, Lin Jian, spokesman for the Ministry of Foreign Affairs of China, said that the United States has politicized, generalized, and instrumentalized economic, trade, and technological issues, and has continuously increased chip export controls on China, coerced other countries, and suppressed China's semiconductor industry, seriously undermining international trade rules and damaging the stability of the global supply chain, which is not beneficial to any party. China has always firmly opposed this. We hope that relevant countries can distinguish right from wrong, resolutely resist coercion, jointly maintain a fair and open international economic and trade order, and truly safeguard their own long-term interests.

This article is an exclusive article of Observer.com and may not be reproduced without authorization.