NVIDIA has told customers in China it is delaying the launch of a new artificial intelligence (AI) chip it designed to comply with U.S. export rules until the first quarter of next year, two sources familiar with the matter said.

The delayed chip is the H20, the most powerful of three China-focused chips Nvidia has developed to comply with fresh U.S. export restrictions, the sources said, and could complicate its efforts to preserve market share in China against local rivals like Huawei.

The California-based AI chip giant had been expected to launch the new products as early as Nov. 16, chip industry newsletter SemiAnalysis reported this month.

However, the H20 launch has now been pushed back until the first quarter of next year, the sources said, with one saying they were advised it could take place in February or March.

The sources said they were told that the H20 was being delayed due to issues server manufacturers were having in integrating the chip.

In addition to the H20, Nvidia has been planning two other chips to comply with new U.S. export rules — the L20 and L2.

Nvidia is betting on the chips to help it preserve its market share in China after it was barred from shipping products, including its advanced A800 and H800 AI chips, by Washington’s tightened export rules.

The A800 and H800 were introduced as alternatives for Chinese customers in November 2022, about a month after the Biden administration first banned exports of advanced microchips and equipment to China.

The H20, L20 and L2 include most of Nvidia’s newest features for AI work, but have had some of their computing power measures cut back to comply with new U.S. rules.

(SD-Agencies)