Nvidia is reportedly preparing a non-Hopper series chip for China

China's AI ambitions are currently hobbled by the lack of powerful chips and restrictions the US has imposed on selling GPUs to Chinese customers. While Nvidia already designed a China-specific Hopper H20 chip to bypass export restrictions, the Trump administration recently notified the chip maker that it now requires an export license to sell H20 chips to China.

As reported by Reuters, Nvidia CEO Jensen Huang has said the company no longer works on a stripped-down version of H20 chips for China because the chips can not be modified further. "It's not Hopper because it's not possible to modify Hopper anymore," Huang said.

The Hopper H20 chip came into life after the US government banned Nvidia from selling H800 chips to China. While H20 is less powerful than Nvidia's top products, it's still in high demand among Chinese customers. With Nvidia abandoning H20 chips for the Chinese market, the company might be working on a downgraded version of one of Blackwell chips to maintain its presence in China.

China accounts for 13 percent of Nvidia's sales and generated $17 billion in revenue for Nvidia in the fiscal year ending January 26. Thus, Nvidia doesn't want to give up on the Chinese market at any cost. After the recent US export restrictions, the Nvidia CEO visited China to meet with local customers. The chip maker also plans to establish a research and development center in Shanghai to strengthen its foothold.

The Nvidia CEO also denied rumors of AI chip diversion into China, saying these systems are too big to smuggle into China. "There's no evidence of any AI chip diversion. These are massive systems. The Grace Blackwell system is nearly two tons, and so you're not going to be putting that in your pocket or your backpack any time soon," Huang said.

After Trump visited the Middle East and Nvidia inked a lucrative deal with Saudi Arabia to sell Blackwell chips, the US Department of Commerce announced rescinding the Biden-era Artificial Intelligence Diffusion Rule. The law restricts companies from selling US-made AI chips to foreign customers.