NVIDIA Denies Plans to Launch 'China-Specific' AI Chip Before Year-End

According to Reuters, AI giant NVIDIA (NVDA-US) on Thursday (20th) denied a report by The Information, stressing that the company does not plan to ship an AI chip specially designed for Chinese customers before the end of this year.

Earlier on Thursday, The Information reported exclusively that two NVIDIA employees claimed the company plans to begin small-batch shipments of an AI chip tailored for Chinese clients before year-end to capture the rapidly growing AI inference market, with several customers already placing orders.

The report stated that the chip is a version of NVIDIA's Language Processing Unit (LPU), using technology licensed from startup Groq, and works alongside Graphics Processing Units (GPUs) to accelerate AI chatbot response times.

It was reported that the chip complies with U.S. export control regulations. Since NVIDIA's next-generation Vera Rubin AI system is restricted by U.S. rules from being supplied to the Chinese market, the company has modified related software so that the LPU can operate with processors available in China.

In response, a NVIDIA spokesperson clarified: 'Reports regarding NVIDIA's LPU are incorrect. We are not currently selling LPUs in the Chinese market, nor do we have a China-specific LPU in our product roadmap.'

Over recent months, NVIDIA's business in the Chinese market has continued to evolve.

Reuters reported in March this year that NVIDIA was preparing an AI chip compliant with Chinese market requirements to compete in the fast-growing AI inference market.

Meanwhile, Washington approved in May for NVIDIA to sell its H200 AI chips to a few Chinese enterprises including Alibaba, Tencent, and ByteDance, though deliveries only began recently. NVIDIA continues to market its Vera CPU to Chinese customers.

CEO Jensen Huang said on May 20 that due to the ongoing escalation of U.S. export restrictions, NVIDIA has 'largely ceded' the Chinese AI chip market to Huawei, acknowledging the rapid rise of China's domestic semiconductor ecosystem. He admitted that NVIDIA's chances of returning to China's high-end AI chip market in the short term are extremely limited.

China previously accounted for at least one-fifth of NVIDIA's data center business revenue, but in April, the Trump administration further tightened restrictions, requiring NVIDIA to obtain licenses to export AI chips to China and certain countries, effectively excluding it from China's high-end AI chip market.

NVIDIA (NVDA-US) closed Thursday down slightly by 0.33%, at $216.85 per share, with an intraday high of $219.86 and low of $215.66, giving it a market capitalization of approximately $5.25 trillion.