Nvidia is back at it… this time with a lobotomized, export-compliant AI chip for China that’s sure to piss off every Commerce Department paper pusher imaginable. In short, this new underpowered compromise wrapped in a Blackwell sticker and sold for half the price of the real thing, is expected to start mass production in June and land somewhere between $6,500 and $8,000. That’s a solid 30-40% haircut from the now-banned H20 chip, which was going for $10K–$12K before Washington slapped it off the shelf. 

(Source: Giphy) 

So what’s missing? Oh, just all the good stuff of course. To dodge the latest U.S. export curbs, Nvidia had to gut the features that made its previous chips valuable. That includes ditching high-bandwidth memory (HBM) in favor of GDDR7, and skipping the use of TSMC’s advanced CoWoS packaging tech… which is basically like swapping out a Rolls-Royce engine for a lawnmower and hoping no one notices.

This leaves us with a chip that just barely squeaks in under Washington’s export limits on memory bandwidth, capping out at around 1.7 terabytes per second… a.k.a. the legal ceiling set by the new regulations. The H20, by comparison, was hitting a juicy 4 TB/s. Keep in mind, this is Nvidia’s third attempt at staying in China’s good graces post-ban, and it’s less of a strategic pivot and more of a desperate attempt to salvage what’s left of its $50 billion China data center opportunity. After the H20 got axed in April, Nvidia reportedly considered just downgrading it. Then Jensen Huang came out and said Hopper-based chips (like H20) are now un-fixable under the current rules. So, now they’re trying something fresh with Blackwell… even if it mimics a Happy Meal Toy. 

(Source: CNBC) 

The reason for the escapade all has to do with salvaging market share. Nvidia’s China share has cratered from 95% pre-2022 to about 50% today, according to Huang himself. So, who’s cashin’ checks and snappin’ necks in the Red Dragon now? Huawei, with its homegrown Ascend 910B and the incoming 910C, which, to be clear, will absolutely outperform Nvidia’s export-compliant Blackwell knockoff. But even still, that’s not the whole game. 

See, Nvidia’s play isn’t brute-force hardware dominance. It’s software lock-in. CUDA, their proprietary AI software stack, is still the cocaine of the machine learning world. If you’re a Chinese AI firm forced to pick between a slightly underpowered Nvidia chip that runs your entire stack, or a Huawei chip that’s faster but requires you to rewrite your software from scratch… a lot of developers are going to take the path of least resistance, even if it means less performance.

(Source: WCCFTech) 

This is exactly where Nvidia is still dangerous. Even with weaker silicon, they’ve got the ecosystem. And they’re betting that in a country where time-to-market is everything, and where software retooling can mean delays, compliance headaches, and bugs, CUDA might still be sticky enough to keep clients on the leash. That said, this is not necessarily a position of strength. More missionary if you will. Jensen Huang has already admitted they had to write off $5.5 billion in inventory due to the H20 ban, plus walk away from $15 billion in potential sales. And it’s only going to get weirder now that Trump is threatening 50% tariffs on the EU and presumably looking at Taiwan like Kendrick looks at Drake. 

Of course, the new Blackwell chip, which is either called the 6000D or the B40, depending on which leak you believe… enters mass production in June. A second, slightly more capable Blackwell variant is also reportedly in the pipeline, with production slated for September. Meaning, Nvidia is hoping this two-pronged approach will let them flood the Chinese market with “good enough” AI chips before the next export rule blindsides them again.

(Source: Giphy) 

Will it work? Maybe. They’re expected to sell over a million units by year’s end, and even if each one brings in less revenue, the volume might cover the gap. But is it sustainable? Ehh, we’ll see. Nvidia’s playing whack-a-mole with U.S. regulators while Huawei builds faster chips and local startups gain confidence. If the U.S. tightens the export screws again… or bans CUDA outright… Nvidia’s China cash cow will be taken behind the barn and shot. 

For now, only time will tell what happens next, but it’s definitely worth keeping an eye on. Meaning, place your bets accordingly, friends… and keep your head on a swivel. Until next time… 

P.S. Some fat cat executive sold $9.4 million of their company's stock this week… a company, mind you, that’s single-handedly responsible for your kid’s sugar rush before 8 a.m. Curious to see why? Click here to join Stocks.News premium and get these insider transactions delivered to you on a silver platter. 

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