Nvidia seeks to establish a research and development center in Shanghai

Nvidia seeks to establish R&D center in Shanghai

New statement from Nvidia spokesperson

CEO Jensen Huang emphasized the importance of China during his visit in April

Shanghai could provide incentives for Nvidia's projects, and may offer large plots of land for the R&D center

Reuters Hong Kong, May 16 - Three sources said that Nvidia (NVIDIA) NVDA.O is scouting locations in Shanghai for an R&D center, reflecting the strategic importance of the Chinese market, as U.S. restrictions on advanced chip exports have impacted sales in China.

One source said that Nvidia began its search in early 2025, primarily evaluating locations in the Minhang and Xuhui districts of Shanghai.

Two of the sources said that the project's progress accelerated after CEO Jensen Huang's sudden visit to China last month.

Following new restrictions imposed by the U.S. government on Nvidia's shipments of H20 chips to China, Huang visited China immediately to meet with senior Chinese officials, including Vice Premier He Lifeng and Shanghai Mayor Gong Zheng.

Earlier this month, Reuters reported that Nvidia plans to release a downgraded version of the H20 chip for the Chinese market within the next two months to boost its sales in China. nL6S3RH05J

An Nvidia spokesperson stated in an email: "We will not send any GPU (graphics processing unit) designs to China for modification to comply with export controls."

The spokesperson added that the company is leasing a new office space for its existing employees in China but will not send core intellectual property or GPU designs to that facility or anywhere else in China.

On Friday, when asked by reporters in Taipei about the reports regarding the company's plans to establish a research center in Shanghai, Huang said, "We already have a research center in Shanghai. We have 2,000 employees in Pudong. Nvidia has a 30-year history in China."

According to Nvidia's website, the company currently has offices in Beijing, Guangzhou, Shanghai, and Shenzhen.

In the fiscal year ending January 26, the Chinese market generated $17 billion in revenue for Nvidia, accounting for 13% of the company's total sales.

Two sources said that the Shanghai government has expressed a willingness to provide incentives for Nvidia's project, including tax reductions.

One source added that the Shanghai government is also considering providing large plots of land for Nvidia's R&D center in China.

The Shanghai municipal government did not immediately respond to requests for comment. The sources declined to be named as the plan has not been made public.

After his visit to China, Huang told CNBC that the scale of China's artificial intelligence market is expected to reach about $50 billion in the next two to three years.

He said that being excluded from this rapidly expanding industry would be a "huge loss" for Nvidia, especially in light of the intensifying competition with Huawei