Nvidia Planning New AI Chip for China, Says Report. What It Means for the Stock.

Nvidia chips are the favored choice for training artificial-intelligence models. (Joel Saget/AFP via Getty Images)

Nvidia stock was rising Tuesday following a report that it is aiming to release a new artificial-intelligence chip for the Chinese market.

Nvidia shares were up 0.3% at $182.51 in premarket trading. The stock rose 0.9% on Monday.

The stock looks unlikely to move significantly before Nvidia’s earnings on Aug. 27. However, it could be receiving a slight boost from news that it is developing the new AI chip, which would be more powerful than the H20 model currently permitted to be sold in China, according to a Reuters report, which cited anonymous sources.

“We evaluate a variety of products for our roadmap, so that we can be prepared to compete to the extent that governments allow. Everything we offer is with the full approval of the applicable authorities and designed solely for beneficial commercial use,” an Nvidia spokesperson said in an emailed statement.

Nvidia has agreed to pay 15% of the revenue generated from AI chip sales in China to the U.S. government, after the Trump administration began approving licenses for processor exports to the Chinese markets.

Separately, Nvidia disclosed in a filing that CEO Jensen Huang sold 150,000 shares in the company for $27.1 million. Huang’s so-called Rule 10b5 trading plan sold shares Aug. 14 and 15 at an average price of $180.80 each. Huang now owns 72.8 million shares in a personal account, according to a form he filed with the Securities and Exchange Commission, and owns several hundred million more shares via trusts and partnerships.

The sale was made through a trading plan the CEO adopted March 20 to sell six million shares. Such trading plans are used to remove the possibility that insiders might benefit from their knowledge of nonpublic information. When preset parameters, such as price, volume, and timing, are met, the plans automatically execute trades.

Among other chip makers, Advanced Micro Devices was falling 0.6% and Broadcom was down 0.4% in premarket trading.

Write to Adam Clark at adam.clark@barrons.com