Nvidia Plans R&D Center in Shanghai Amid Export Controls
Nvidia is planning to establish a research and development center in Shanghai to stay competitive in China. The move comes as the leading producer of artificial intelligence processors faces declining sales due to tightened U.S. export controls.
In a recent meeting in Shanghai, Nvidia’s CEO Jensen Huang discussed the initiative with the city’s mayor, Gong Zheng. According to sources, Nvidia is securing new office space in Shanghai to accommodate current staff and possible expansion.
The proposed R&D center aims to address specific demands from Chinese customers and navigate the technical requirements posed by U.S. regulations. However, Nvidia emphasizes that its core design and production will remain overseas, citing the sensitivity of transferring intellectual property to China. A spokesperson stated, "We are not sending any GPU designs to China to be modified to comply with export controls."
The Shanghai team is expected to participate in global R&D efforts, including chip design verification, product optimization, and sector-specific research such as autonomous driving. Mr. Huang is also keen to tap into China’s AI talent pool. Nvidia is actively hiring engineers in Shanghai for roles to advance their deep learning hardware and software, and to optimize ASIC designs on a global scale.
While the Shanghai government has shown preliminary support, Nvidia is advocating for U.S. approval. The company, with approximately 2,000 employees in the city mainly in sales and support functions, is enhancing its research footprint as it aims to secure its leadership in China’s market. Nvidia views Huawei and other local competitors as potential threats capable of developing a rival AI ecosystem.
Despite China contributing about 14% to Nvidia’s revenues last year, estimated at around $17 billion, Mr. Huang predicts this could expand to a $50 billion market shortly.
At a Milken Institute event, Huang stated, "We want to build the world’s AI where American standards are adopted worldwide. Leaving a market entirely opens it to others, like Huawei, who is a formidable competitor."
Meanwhile, the U.S. administration has warned both domestic and international companies about potential criminal penalties resulting from the use of AI chips made by Huawei, which violates U.S. export controls. Following new restrictions on the H20 chip, a redesigned product to comply with Biden-era regulations, Huang met with China’s vice-premier, He Lifeng, in Beijing.
Nvidia is currently offering L20 processors—lower-end versions without high-bandwidth memory—as alternatives for Chinese clients. However, major Chinese tech firms are cautious about adopting these processors due to their performance limitations compared to local products.
Executives from leading Chinese companies like ByteDance, Alibaba, and Tencent are observing geopolitical trends to determine if Nvidia can provide redesigned high-end chips to meet their needs. Despite various explorations, Nvidia’s plans remain unfinalized due to legal uncertainties.
