Nvidia releases slower, less powerful AI chip for China

• The US has banned exports of some tech like chips to China, citing national security concerns.
• Nvidia has developed a processor in China that complies with the restrictions.

Nvidia, the world's leading chipmaker, has unveiled a new gaming processor that can be sold in China while still complying with US export rules.

The RTX 4090 D, which appeared on the company's Chinese website on Thursday, promises "a quantum leap in performance and AI-driven graphics."

It will be available to purchase exclusively in the region from January.

However, the new version performs around 11% lower than the original 4090 chip that was first released in late 2022. It has fewer processing subunits which help to accelerate AI workloads, an Nvidia spokesperson told Bloomberg.

By offering less advanced capabilities, the stripped-back chip might be able to help Nvidia maintain its dominance in China's $7 billion AI chip market.

The company currently holds a 90% share of the Chinese market, according to Reuters. But US bans on high-tech exports to China, introduced in the interests of national security, have heightened worries that Nvidia's sales could take a hit.

CEO Jensen Huang said the company had been working closely with the US government to create products that complied with the regulations.

The solution may not be that simple.

Previously, Nvidia has made modifications to its GPU chips for the Chinese market only for the new versions to be added to the list of banned technology by the US government.

For example, after exports of Nvidia's H100 chips — the GPUs that are used to power ChatGPT — were banned in October 2022, the company released new versions, including the H800, as a workaround.

Several months later, the US banned exports of those new chips, too.

Chinese companies are rapidly debuting new AI models to rival their US counterparts, supported by the government's $41 billion fund to boost the industry.

Huang recently signaled another solution to the ongoing tensions between the US and China was to shift his supply chain to the wider South Asia region.

"I have great confidence that Southeast Asia is going to be a very important technology hub," Huang told reporters in Malaysia during a visit to the region. He also announced new investment in Singapore's AI development.

Despite the pressure, the Santa-Clara-based chipmaker beat expectations in the third quarter, as revenue soared 206% to $18.1 billion. The company's stock has tripled this year, boosting its market value beyond $1 trillion.