Why Nvidia's Cheap AI Chip for China Matters

After winning key supply deals in Saudi Arabia, Nvidia (NVDA) will not miss out on the Chinese market. The firm will reportedly launch new chips for artificial intelligence for China-based firms.

In April, the Trump administration reviewed Biden-era AI chip restrictions on China. To grow its sales, Nvidia needed a low-cost product that had lower performance. It will have a GPU solution that belongs to Blackwell architecture. These chips will have a price in the range of $6,500 and $8,000, according to Reuters. By comparison, H20 solutions sell for between $10,000 and $12,000.

Nvidia’s low-cost chip matters to its bottom line. China is still a meaningful contributor to its revenues. It accounted for 13% of sales in the last year. U.S. export restrictions would help Chinese chip suppliers like Huawei thrive. Since Nvidia GPUs are better and more efficient, Chinese tech firms would prefer them.

AI Developments

Late last month, Alibaba (BABA) released a next-generation large language model. The open-sourced LLM is a breakthrough in AI. Qwen3 has better reasoning, multilingual task support, and instruction following. More importantly, Qwen3 uses a hybrid reasoning model. This combines LLM capabilities with advanced, dynamic reasoning.

Tencent (TCEHY) is not under pressure to buy more AI chips. The firm already stockpiled plenty of H20 chips for its AI developmental needs.

Baidu (BIDU) is performing well, too. It reported strong AI cloud growth in the first quarter.