Last October, Nvidia CEO Jensen Huang admitted that its market share in China had fallen to virtually zero. However, it seems that Nvidia is not giving up on the Chinese market, as it is now reportedly receiving orders from Chinese customers to purchase the new Vera processor.
People familiar with the discussions told Reuters that the chip could be shipped as early as August.
Despite its efforts, Nvidia has failed to maintain a foothold in China due to US export controls, which have blocked shipments of its most powerful AI accelerators to China.
In response, Beijing has steered domestic buyers toward local products Alternatives like Huawei And others.
According to reports, no Chinese customer has received any H200 GPU despite 10 companies obtaining US licenses, because Chinese authorities have withheld their own approval.
Why is Nvidia pushing Vera chips to China?
With Vera, Nvidia is entering the server CPU market, a sector that currently faces fewer export restrictions than high-end AI accelerators.
The chip is Nvidia’s first standalone central processor, designed for the computing tasks that AI agents rely on, such as database queries and code compilation.
According to Nvidia, Vera chips, built on the Arm architecture, are 1.8 times faster than comparable x86 processors on workloads associated with standalone AI systems. Intel’s Xeon lines and AMD’s Epyc lines have dominated server processors for decades using x86 designs.
“AI customers will be the biggest users of computing.” Huang said at an event, adding that “Vera is the first CPU designed for this future.”
Are Chinese buyers showing interest in the Nvidia chip?
At least one major Chinese cloud provider plans to order more than 300 servers, each equipped with two Vera processors, for initial testing. As someone said Close to it.
However, it is currently unclear whether those experiments will translate into widespread purchases. Software compatibility issues and difficulty migrating workloads already built around on-premises chips may slow adoption, a second source said.
There’s also the hurdle of pricing, with a single Vera processor costing up to $20,000 before volume discounts, and a full 256-chip rack costs roughly $10 million depending on memory configuration, according to SemiAnalation estimates.
One of the sources also added that Chinese buyers plan to deploy the chips in data centers outside China, where domestic use is still considered politically sensitive.
How important are Vera chips in the AI industry?
The global AI industry is shifting from training large models to running them at scale, a phase called inference.
This shift favors CPUs and custom silicon alongside GPUs, and has led to a shortage of CPUs. Intel flagged this development in February when it asked Chinese customers to expect a six-month lead time for server processors.
AMD said last month that the global CPU market is “tight,” with demand exceeding supply and current expectations.
Nvidia Vera expects to generate $20 billion in revenue by the end of its current fiscal year, which ends in January 2027. Cloud providers Alibaba and ByteDance are said to be among the companies collaborating on Vera deployments, though it has not been confirmed whether they have placed orders.
Nvidia’s fiscal 2027 first-quarter results, announced in May, showed $81.6 billion in total revenue, an increase of 85% year-over-year, with the data center segment accounting for $75.2 billion of that total.
What are the geopolitical risks surrounding Vera?
If the United States decides that CPU processors contribute to the development of advanced artificial intelligence in China, new restrictions may follow.
Beijing’s pursuit of semiconductor self-sufficiency adds another layer to the risks. Chinese customers may treat Nvidia hardware as a temporary solution until local alternatives catch up, which is bad news for Nvidia.
Nvidia has also moved to shore up its political position in Washington. The company recently hired Bruce Andrews, a former Obama-era Commerce Department official and former head of government relations at Intel, to lead its government affairs operation.
