Empire State Review Team 
Nvidia, the global leader in AI semiconductors, is preparing to roll out a lower-cost version of its high-powered Blackwell AI chip for the Chinese market in a strategic effort to comply with U.S. export regulations while sustaining its presence in one of the world’s largest and fastest-growing tech economies. The move, confirmed by industry insiders and reported on May 25, 2025, reflects the ongoing geopolitical tensions that are reshaping the global semiconductor industry and altering how American companies do business in China.
The new chip, based on Nvidia’s Blackwell architecture, is expected to be released as early as June 2025. It is reportedly designed with reduced performance capabilities to stay within the technical thresholds set by recent U.S. export control measures, which limit the performance metrics—such as memory bandwidth and interconnect speed—of chips exported to China. These measures were part of the Biden administration’s broader strategy to prevent China from acquiring the most advanced technology that could be used for military or surveillance applications.
This stripped-down version of the Blackwell chip is estimated to cost between $6,500 and $8,000 per unit, compared to $10,000–$12,000 for Nvidia’s previously exported H20 chips. The cost savings are attributed to technical downgrades, including the use of GDDR7 memory instead of the more advanced high-bandwidth memory (HBM), and the exclusion of TSMC’s CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging—a key technology that enables superior data throughput in top-tier AI chips.
Despite the reduced performance, the chip is expected to appeal to a broad range of Chinese enterprises eager to adopt AI technology but constrained by new regulatory limits. It marks a tactical compromise for Nvidia: staying engaged in China’s lucrative market while respecting export restrictions imposed by Washington.
Nvidia’s CEO Jensen Huang has publicly voiced his concern about the implications of these export curbs. In prior statements, Huang characterized the U.S. restrictions as shortsighted and counterproductive, arguing that they have not only constrained American business opportunities but have also accelerated China’s resolve to become self-reliant in advanced semiconductor technologies. “You can’t try to freeze a country out of progress. They will just build it themselves,” Huang said at a recent industry event.
Indeed, the restrictions have already contributed to a noticeable decline in Nvidia’s Chinese market share, which has dropped from approximately 95% to around 50% over the last two years. Chinese tech giants and startups alike are increasingly turning to domestic alternatives such as Huawei’s Ascend 910B chip. While these chips currently trail Nvidia’s in raw power and ecosystem maturity, they benefit from growing national support and are closing the performance gap.
In response, Nvidia is not only releasing one, but reportedly working on a second chip tailored specifically for Chinese export. This additional chip is expected to debut by September 2025 and will likely feature similar performance adjustments to meet evolving export compliance requirements. The company has also doubled down on software and services in China, including support for AI development tools that are compatible with legacy hardware and reduced-capability GPUs.
The upcoming chip launches underscore how global technology companies are increasingly adapting to the fractured geopolitical landscape. While maintaining dominance in AI hardware, Nvidia must now navigate a tighter regulatory environment where its ability to innovate is constrained not only by market demands but also by international diplomacy.
At the same time, China’s AI sector continues to grow rapidly, driven by applications in manufacturing, e-commerce, public services, and defense. Demand for AI hardware remains strong, and Chinese firms are investing heavily in domestic chip development as well as building massive data centers that require scalable, cost-effective processing power. This presents a continued opportunity for Nvidia, even if the conditions are more complicated than before.
Nvidia’s strategic rollout of a budget-friendly AI chip tailored for China shows how companies are reengineering products to align with political realities while staying relevant in global markets. With the semiconductor industry increasingly at the center of U.S.–China relations, how companies like Nvidia adapt may set the tone for global tech competition in the years ahead.
