NVIDIA is making commendable efforts to mitigate the effects of harmful U.S. export restrictions. The startup is developing a second-generation, lower-cost budget AI chip. It’s influenced by the Blackwell architecture, but uniquely designed for the Chinese market. This move comes in direct response to recent costly licensing requirements. These rules prevent NVIDIA from selling its more advanced H20 AI chips to businesses in China.
The new Blackwell AI chip is going to cost between $6,500 and $8,000. This prices it as a much more affordable alternative to NVIDIA’s H20 GPUs, which are priced anywhere from $10,000 to $12,000 at the moment. This careful, strategic pricing opens the doors even wider for NVIDIA’s competitiveness in the rapidly advancing Chinese AI sector. Simultaneously, it keeps U.S. government records for regulatory compliance.
In part, NVIDIA’s new move to develop a cheaper alternative was a reaction to the economic impact of the U.S. restrictions on semiconductor exports. The abrupt halt sent the company reeling with an astoundingly high $4.5 billion first quarter fiscal 2026 charge. This charge stemmed not just from development costs, but from licensing realities that handcuffed its sales efforts. That’s $2.5 billion of H20 chips they weren’t able to ship in that time frame. Each one of these constraints stifled their potential to transform.
NVIDIA anticipates that licensing restrictions will prove to be the greatest restraint. As a result, they’re projecting an $8 billion second quarter revenue downturn. This realistic projection underscores how severely this change would affect company operations. More specifically, it demonstrates that NVIDIA has to reposition its product lineup to remain a market leader against stiff competition.
According to a new report from Taiwanese tech publication Digitimes, NVIDIA is on the verge of getting new GPUs specifically designed for AI workloads into China. Striking new information, shared with FreightWaves from trusted supply chain sources that broadens the strategy of the company. Like any startup, we’re figuring out how to work through applicable international trade regulations, but the demand in the region for cutting-edge technology is enormous.
The U.S. government’s imposition of licensing requirements on exports of NVIDIA’s H20 AI chips has created a challenging landscape for the company. We’re encouraged to see NVIDIA making this important pivot to develop more accessible products, including the new Blackwell AI chip. This proactive strategy further ensures the company stays at the forefront of a key industry.
