May-30-2025 — Nvidia and AMD are preparing to release a new generation of scaled-back AI GPUs for the Chinese market in Q3 2025, according to supply chain sources. These chips are specifically designed to comply with increasingly strict U.S. export regulations while still supporting key Chinese AI frameworks like DeepSeek.
Nvidia is rolling out the B20 GPU, a version of its Blackwell architecture with reduced compute and memory capabilities. Meanwhile, AMD is launching the Radeon AI PRO R9700, targeting domestic AI workstations focused on inference, model fine-tuning, and data-intensive applications. Demand from Chinese tech buyers is reportedly strong, signaling a potential market rebound despite mounting political pressure.
U.S. Clampdown Intensifies
Following the Biden administration’s introduction of a three-tier control system on AI chip exports, President Donald Trump—now back in office—has implemented even tougher trade policies. These include higher tariffs, stricter country-of-origin requirements, and an expansion of “Made in USA” mandates. Notably, Trump extended the ban on Nvidia’s H20 GPU, barring its sale in China.
Although Trump dismantled Biden’s tiered system, he reinforced legal warnings against companies collaborating with Huawei, whose Ascend AI chips are now under scrutiny. These sweeping actions have heavily impacted Nvidia, which previously dominated China’s AI GPU market with a 90% share. That number has now dropped to about 50%, raising questions about the effectiveness of U.S. measures in slowing China’s AI growth.
Huang: Curbs Are Hurting, Not Helping
Nvidia CEO Jensen Huang has been vocal in criticizing the export restrictions, describing them as both ineffective and damaging. He argues that the curbs have failed to achieve their strategic purpose and are instead accelerating the rise of Chinese alternatives.
“China accounts for nearly half of the world’s AI research talent,” Huang noted, emphasizing the country’s importance to global innovation. He praised advancements like DeepSeek and Alibaba’s Tongyi Qianwen (Qwen3), stating that Chinese AI development is unstoppable—with or without Nvidia’s chips.
He also warned that restricting Nvidia would only open the door for local players like Huawei to dominate. As evidence of the damage, Nvidia has written down $5.5 billion in unsellable inventory—mostly AI chips initially destined for China. Huang described the hit as more than the yearly revenue of many semiconductor companies, also noting the impact on U.S. tax revenues.
Despite the setback, Huang affirmed that Nvidia’s commitment to China remains unchanged.
AMD Eyes Opportunity
While traditionally a distant second in China’s AI GPU market, AMD is now gaining traction. Insiders suggest that its new, regulation-compliant chips could help it close the gap with Nvidia.
Both Nvidia and AMD plan to start shipping these customized GPUs in July 2025. Their revised hardware is tailored to meet local demand while staying within U.S. export boundaries—a strategy that may define the next phase of AI competition in China.
