By CNBC AI News – May 19, 2025 | In a strategic chess move amid turbulent U.S.-China tech trade dynamics, NVIDIA has reportedly entered advanced discussions to establish an engineering hub in Shanghai. Recent media reports suggesting the company plans to tailor chip designs for Chinese export compliance drew swift clarification from the Santa Clara-based semiconductor giant this week.
The Wall Street Journal first reported NVIDIA’s exploratory talks for locations in Shanghai’s Xuhui and Minhang districts, citing industry sources. This speculation gained momentum following CEO Jensen Huang’s recent high-profile visit to Shanghai – his first since 2023 – which sources indicate accelerated internal deliberations about expanding the company’s mainland footprint.
NVIDIA’s official statement to CNBC emphatically denied key elements of these reports: “Contrary to current narratives, our company maintains strict compliance protocols that preclude sharing graphic processing unit (GPU) blueprints with Chinese entities. We are not deploying chip design teams in China nor modifying product specifications domestically for export regulation compliance.”
This carefully calibrated response comes amid intensifying regulatory scrutiny over semiconductor technology flows between the world’s two largest economies. The proposed Shanghai facility, which would function as expanded corporate offices rather than an R&D powerhouse, represents a delicate balancing act between maintaining operational presence in the world’s second-largest semiconductor market and adhering to U.S. Commerce Department restrictions.
Market observers note that while NVIDIA derives approximately 10% of its revenue from Chinese operations according to Q1 2025 financial disclosures, it has cautiously recalibrated its engagement since the Biden administration expanded export controls in 2023. This latest maneuver suggests a middle-path approach – maintaining critical commercial relationships while preserving technical firewalls.
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