Nvidia is looking to break into the Chinese market with a new artificial intelligence (AI) chip that will begin mass production as early as next month, according to Reuters.
Newsweek reached out to the White House by email outside of normal business hours on Saturday for comment.
Why It Matters
Nvidia is the leading chip maker in the United States and has gotten caught up in the middle of a U.S.-China trade war. As of April, the U.S. made up around 42 percent of Nvidia business, versus China and Hong Kong’s 15.5 percent, according to financial data compiled by CSI Market.
President Donald Trump has pushed to shift global manufacturers back to the U.S. to avoid his tariffs and create more jobs and growth for the American economy. He had hit China with a 145 percent tariff on all goods, but then days later added exemptions for smartphones, computer monitors and various electronic parts.
As part of that, he expedited the approval of permits so that Nvidia could start investing around $500 billion in chip manufacture infrastructure domestically period.
China remains a huge market for Nvidia despite the trade tensions between Washington and Beijing. The U.S., however, continues trying to restrict China’s access to high quality chips to limit their growth and development of AI.
What To Know
The new chip is part of the Blackwell dash architecture series and is expected to cost significantly less than its predecessors. Previous chips cost between $10,000 and 12,000, while the new chips are expected to be priced between $6,500 and $8,000.
However, the lower price point indicates “weaker specifications and simpler manufacturing requirements,” according to Reuters.
The chip will not use advanced packaging technology as part of its production, which may explain its reduced price.
Nvidia attempted to repackage and develop a downgraded version of its H20 chip in order to get around export controls implemented by Trump, but the plan did not work out, Reuters reported.
Recent export restrictions introduced a limit on the memory bandwidth of GPU chips, which would in turn continue to limit the ability of other nations to develop AI.
Despite these efforts, China was able to produce the DeepSeek AI, which utilized the lower grade chips available to the country thanks to U.S. controls. The AI model was also trained and developed at a reportedly and relatively low cost of $6 million.
I-Hwa Cheng/AFP via Getty Images
What People Are Saying
An Nvidia spokesperson told Newsweek in an emailed statement on Saturday afternoon: “We are still evaluating our limited options. Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 Billion datacenter market.”
What Happens Next?
Nvidia reportedly plans to enter production on the Blackwell chip in June, but the timeline for sales to China remains unclear.
Meanwhile, after Trump announced his 145 percent tariff on products out of China, and Beijing retaliated with “reciprocal” tariffs on U.S. products at 125 percent, Treasury Secretary Scott Bessent met with his Chinese counterparts earlier this month and negotiated a significant, but temporary, reduction as a commitment to further trade negotiations.