NVIDIA Partners with DeepSeek to Create Custom AI Chips for China; Major Strategy Shift for Domestic Market Expansion

NVIDIA appears to be making bold moves to capture the Chinese market, as recent reports suggest a strategy focused on developing “China-specific”chips through collaborations with local technology companies. This approach comes in response to new U. S.export restrictions that have hindered NVIDIA’s ability to sell its popular H20 AI accelerators in China, resulting in significant potential revenue losses.

NVIDIA’s Strategic Shift: A Focus on the Chinese Supply Chain

The recent U. S.sanctions have severely impacted NVIDIA, given that their revenue from China is substantial, surpassing previous estimations. This revenue stream also involves complex trade dynamics with other nations, including Singapore and Malaysia. In light of the U. S.export controls, NVIDIA CEO Jensen Huang’s swift visit to China suggested an urgent need to explore alternatives for sustaining their operations in one of their largest markets.

According to Ctee, NVIDIA plans to partner with DeepSeek to jointly develop custom AI chips. While specifics about this collaboration remain vague, it is clear that NVIDIA aims to leverage China’s extensive supply chain, including facilities for high-bandwidth memory (HBM), process nodes, and packaging. This move could not only mitigate the effects of U. S.restrictions but also align with local market demands.

It is speculated that in the future, Nvidia will jointly develop and design new chips with DeepSeek. The R&D team may be located in China and deeply integrated with the local industry’s big model computing framework to create an ecosystem exclusive to China. It remains to be seen whether Nvidia’s overseas headquarters plan, originally intended for Taiwan, will change.

– Ctee

NVIDIA’s intention to establish a dedicated research and development center in China further illustrates their commitment to strengthen ties with the Chinese market. Adapting to produce “China-compliant”products rather than relying on iterative developments constrained by U. S.regulations is critical for maintaining their competitive edge. With industry rivals like Huawei gaining momentum, NVIDIA must act swiftly to solidify its presence.

NVIDIA To Generate A Whopping $12 Billion From China Despite Restrictions As H20 AI GPU Sees Massive Demand

While Huawei has proven competitive in terms of performance, it is crucial to recognize that NVIDIA retains essential core technologies, including intellectual properties and the widely utilized CUDA software stack. Leveraging its extensive R&D capabilities, NVIDIA is well-positioned to maintain traction in the Chinese market, despite the potential challenges posed by the competitive landscape. However, it is vital to approach these developments with caution, as the geopolitical and trade environments continue to evolve rapidly.

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