Sources revealed today, Friday, that the American company Nvidia, a leader in the manufacturing of computing and artificial intelligence chips, is currently seeking a location in Shanghai to establish a new research and development center that reflects the strategic importance of the Chinese market to the company. This comes in light of the impact of U.S. restrictions on advanced chip exports on Nvidia's sales in China.
Nvidia began searching for potential sites for the center in the Minhang and Xuhui districts in Shanghai at the beginning of 2025, with the sites currently undergoing preliminary evaluation. According to sources, the project gained increasing momentum after a surprise visit by CEO Jensen Huang to China last month, aimed at strengthening relations and solidifying the company's presence in the Chinese market, which is considered one of the world's most important markets for chips and artificial intelligence.
During his visit, Huang met with several senior Chinese officials, including Vice Premier He Lifeng and Shanghai Mayor Gong Zheng, indicating clear government interest in supporting the project. Huang stated in his remarks to CNBC that the artificial intelligence market in China could reach $50 billion in the coming years, making Nvidia's exclusion from this sector a "major loss" for the company.
This move comes after the U.S. imposed new restrictions on the export of advanced H20 chips to China, the only chip Nvidia is legally allowed to sell there. Despite these restrictions, Nvidia plans to release a toned-down version of the H20 chip in China over the next two months, aiming to regain its market share, which has declined in favor of local competitors like Huawei.
China generated revenues of $17 billion for Nvidia during the fiscal year ending in January 2025, representing about 13% of the company’s total sales, reaffirming the importance of the Chinese market in Nvidia's future growth strategies.
Local authorities in Shanghai have expressed their willingness to provide incentives and facilities, including tax breaks and land offerings, for Nvidia to establish the research and development center, reflecting the city's interest in attracting major tech companies like Tesla and Nvidia.
So far, Nvidia (NASDAQ: NVDA) and the Shanghai government have not issued any official statements regarding this still unannounced plan, but sources confirmed that discussions and negotiations are ongoing, with expectations that Shanghai will play a pivotal role in Nvidia's future in the Chinese market.
