Nvidia begins Vera CPU sales pitch to Chinese clients as AI chip strategy shifts

Nvidia Pivots to CPUs After China AI Chips Market Collapse

Nvidia has told Chinese clients that its new Vera CPU for AI data centers could be available as soon as August and that they can begin placing orders, according to three sources familiar with the matter 1

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. The outreach marks a significant strategic shift for the world's most valuable company as it attempts to revive rapidly declining fortunes in China, where shipments of its H200 GPU to the country have stalled for months 1

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Nvidia's market share in China has effectively fallen to zero, CEO Jensen Huang said in October, hurt by U.S. export restrictions on advanced chips and Beijing's push for self-reliance in key technologies 2

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. While Washington has licensed about 10 Chinese firms to buy the H200 GPU, not a single delivery has been made as Chinese officials have withheld approval, keen to nurture domestic suppliers 1

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Chinese Cloud Companies Show Interest in Vera Processors

The Nvidia begins Vera CPU sales pitch has generated tangible interest among Chinese clients. One major Chinese cloud company plans to place an order for more than 300 servers, each containing two Vera CPUs, sources revealed 2

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. The company plans to deploy the systems for testing first and decide whether to place official orders based on the results 1

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Nvidia's first standalone central processing unit built for agentic AI systems—systems that perform tasks autonomously—now in full production, runs up to 1.8 times faster than comparable processors from rivals, according to the company 2

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. Unveiling the Vera chip in March, Huang expected it to become the company's next multibillion-dollar business, with leading cloud firms including Alibaba and ByteDance collaborating to deploy it 1

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Pricing and Market Positioning in AI Data Center Market

A single Vera processor will cost well north of $20,000 before bulk discounts, and a fully configured rack of 256 chips would run to around $10 million, depending on memory chip configuration, according to SemiAnalysis 4

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. Nvidia expects $20 billion in revenue from Vera chip sales by the end of this fiscal year ending in January 1

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Each Vera CPU features 88 Arm cores, 164 MB of L3 cache, 166 MB of L2 cache, and supports up to 1.5 TB of LPDDR5X memory 4

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. The move raises the stakes in Nvidia's competition with major CPU firms Intel and AMD, which are racing to increase supplies of server CPUs for AI data centers 1

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Strategic Shift Toward Inference Computing

The Chinese interest in Vera comes as the global AI race pivots from model training to inference computing, the process of answering queries, where graphics processors face greater competition from CPUs and custom chips 2

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. This shift has helped create a CPU shortage, with Intel notifying Chinese customers of server CPU delivery lead times of up to six months, Reuters reported in February 1

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. AMD flagged last month that the global CPU market is tight, with demand outpacing forecasts and supply constraints expected to persist 2

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Selling CPUs in China could prove less fraught than selling graphics processing units, which face tighter U.S. export restrictions 1

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. Based on Arm technology, Vera puts Nvidia in direct competition with Intel and AMD, which have long dominated the processor market with x86 processors 2

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. Chinese clients plan to initially deploy Vera chips only in their overseas data centers for testing, one source said 1

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Challenges and Future Outlook for AI Hardware Adoption

Whether initial interest translates into large-scale adoption remains to be seen, partly due to issues involving software ecosystems and compatibility as well as the constraints of migrating workloads built around domestic AI chips, sources noted 2

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. Most chips are initially going into large, ready-to-install racks favored by hyperscalers, with simpler two-processor servers expected to ramp up later 1

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Nvidia has already stated they are set to become the largest CPU supplier in 2026, and with Vera entering volume ramp, competition in the data center-oriented CPU markets will intensify 4

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. The company's ability to navigate GPU restrictions while establishing a foothold in the CPU market will determine whether it can reclaim lost ground in China's rapidly evolving AI infrastructure landscape.