• Nvidia budget Blackwell chip for China priced at $6,500-$8,000 aims to circumvent US export restrictions but faces fierce Huawei competition
• Mass production is expected in June as Nvidia’s China market share drops to approximately 50%

Nvidia finds itself making yet another calculated move to stay relevant in China’s lucrative AI market. Despite facing successive waves of export restrictions from both the Biden and Trump administrations, the Nvidia budget Blackwell chip represents the company’s persistent efforts to thread the needle between geopolitical compliance and commercial survival. 

The semiconductor giant is preparing to launch a significantly cheaper version of its cutting-edge Blackwell architecture specifically for the Chinese market, according to Reuters sources—a strategic pivot that raises critical questions about whether accommodation and compromise can sustain competitiveness in a market increasingly dominated by domestic players like Huawei.

The GPU will be part of Nvidia’s latest generation Blackwell-architecture AI processors and is expected to be priced between $6,500 and $8,000, well below the $10,000-$12,000 the H20 sold for, representing a substantial discount that reflects both market pressures and technical compromises. 

Mass production is planned to start as early as June, marking another attempt by the American chip designer to navigate increasingly restrictive US export controls. Frankly, the pricing strategy for this Nvidia budget Blackwell variant tells a story of pragmatic adaptation to geopolitical realities. 

The lower price reflects its weaker specifications and simpler manufacturing requirements. It will be based on Nvidia’s RTX Pro 6000D, a server-class graphics processor, and will use conventional GDDR7 memory instead of more advanced high bandwidth memory. 

Notably, it would not use Taiwan Semiconductor Manufacturing’s advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging technology, further reducing both capabilities and costs. This development comes after a tumultuous period for Nvidia in China.

After the US effectively banned the H20 in April, Nvidia considered developing a downgraded version for China, sources said, but the plan didn’t move forward. The company’s previous flagship offering for China, the H20 chip, faced an effective ban in April 2025, forcing Nvidia to write down approximately $5.5 billion in inventory and commitments.

The Huawei challenge intensifies

The competitive landscape in China has shifted dramatically, with Huawei emerging as a formidable rival. Nvidia’s CEO has revealed that the firm’s share in the China market has almost halved after the Biden-era export restrictions, while Huawei’s Ascend series is gaining traction among major Chinese technology companies.

Huawei’s Ascend 910C and 910B AI chips have been adopted by companies like Tencent, Baidu, and ByteDance for inference workloads.

The Chinese telecommunications giant has also introduced infrastructure solutions that directly compete with Nvidia’s offerings, including the “CloudMatrix 384” rack system in direct competition with Nvidia’s recently announced Blackwell GB200 NVL72 configuration.

The competitive dynamics have become particularly evident in pricing battles. Previous reports indicated that H20 chips being sold in some cases at an over 10% discount to Huawei’s Ascend 910B, demonstrating the pressure Nvidia faces in maintaining market position against increasingly capable domestic alternatives.

Market stakes and strategic implications

China represents a massive market opportunity that Nvidia cannot afford to lose entirely.  Nvidia’s CEO Jensen Huang put the market potential in China at around 50 billion US dollars, making it a critical revenue source despite ongoing restrictions. 

China has been one of the company’s biggest markets, and it recorded more than $17 billion in sales there in 2024. However, the strategic calculus is complex. According to two of the sources, Nvidia is also developing another Blackwell-architecture chip for China that is set to begin production as early as September, suggesting the company is pursuing multiple product lines to address different market segments and regulatory requirements.

The broader implications extend beyond immediate revenue concerns. Huang acknowledged that “China is not behind” and “China is right behind us. We’re very, very close” in AI capabilities, highlighting the intensifying technological competition between American and Chinese semiconductor ecosystems.

Regulatory tightrope and future uncertainties

Nvidia’s product development strategy must navigate an increasingly complex regulatory environment. The Nvidia budget Blackwell chip represents the company’s third attempt to create compliant products for the Chinese market following successive waves of US export restrictions. 

Nvidia CEO Jensen Huang said last week the company’s older Hopper architecture — which the H20 uses — can no longer accommodate further modifications under current U.S. export restrictions.

The ongoing uncertainty around trade policies adds another layer of complexity. Recent reports suggest the Trump administration is considering bilateral negotiation approaches that could create even more unpredictable market conditions for technology companies operating across geopolitical boundaries.

Critical questions ahead

As Nvidia prepares to launch its budget Blackwell offering, several critical questions emerge. Can a significantly downgraded chip compete effectively against Huawei’s advancing capabilities? Will Chinese customers accept performance compromises when domestic alternatives are rapidly improving? 

Most importantly, does this strategy represent a sustainable long-term approach or merely a delaying action in an increasingly challenging market? The answers will likely determine not just Nvidia’s future in China, but also the broader trajectory of technological competition between American and Chinese AI ecosystems. 

With Chinese companies investing heavily in domestic alternatives and government support backing local innovation, Nvidia’s window for maintaining meaningful market share may be narrowing faster than anticipated.