- Nvidia’s China-specific H20 chips are off-sale, but scaled-down Blackwell chips could be approved
- China is a $50 billion opportunity for Nvidia, with potential for 50% annual growth
- China may not want to buy Nvidia chips over supposed security risks and US comments
Nvidia CEO Jensen Huang said that discussions with the US Government on allowing scaled-down Blackwell GPU sales to China have started, but it could take time to reach a deal.
According to Reuters reporting, Trump indicated that Nvidia could sell a less powerful version of Blackwell to China that’s 30-50% less capable than the regular version.
However, the White House fears that even stripped-down AI chips could support China’s military and technological strength, hence the delays that Nvidia is facing with regards to a decision.
Nvidia may be able to start selling low-performance Blackwell chips in China again
Huang estimates that China represents a $50 billion opportunity for Nvidia, potentially growing 50% annually if access to sell chips in the country is allowed. For a company with $46.7 billion in quarterly revenue, that’s a considerable opportunity.
Nvidia had already made the H20 AI chip for China to meet Biden-era export restrictions, but that got banned over security concerns when Trump came to power. Sales of the H20 in China are still on pause, but at an expense to Nvidia which is losing out on billions in sales.
In the meantime, China has been promoting the use of domestic chips to plug the gap left by stalled Nvidia sales. The country has also reportedly been asking local firms to avoid Nvidia’s chips, citing security risks.
China’s reluctance to buy Nvidia chips could be heightened further following comments from US Commerce Secretary Howard Lutnick, who said the plan is to make China addicted to American tech.
On the flip side, Huang argues that enabling American companies to sell AI chips in China helps the US set the standards and win the global race.
Nvidia recently posted a 56% year-on-year rise in quarterly revenue, noting a lack of H20 sales in China and a $180 million release of previously reserved H20 inventory from around $650 million in unrestricted H20 sales.
Huang commended Blackwell’s performance gains, adding that Blackwell Ultra production “is ramping at full speed.”