Newly-tailored chips for China from Nvidia are set for direct competition with a processor developed by domestic giant Huawei Technologies, with the two products having a similar price and performance, according to industry sources.

Nvidia has started to take pre-orders for its H20, a powerful graphics processing unit (GPU) that the US chip design firm can supply to China-based customers for artificial intelligence (AI) training, with a single card price range between US$12,000 and US$15,000, according to industry sources, who declined to be named due to the sensitivity of the matter.

The computing capabilities of the H20 are similar to Ascend 910B, an AI chip developed by Huawei, the Shenzhen-based firm under US trade sanctions, separate sources said, adding that the price would also be similar.

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A high-end server, embedded with eight Nvidia H20 cards, is priced at about 1.4 million yuan (US$195,800), according to one source with direct knowledge of the matter.

Nvidia declined to comment on Friday, while Huawei did not immediately respond to a request for comment.

The Ascend 910B chip is available through various sales channels in China, although the company has never officially confirmed the product's existence, sources said. A distributor from the eastern province of Shandong said on Thursday that a Huawei server embedded with 910B chips sells for around 1.36 million yuan as of January this year.

US trade sanctions prevent Nvidia from exporting to China its advanced GPUs, such as the A100 and H100, which have become sought-after components for AI training. Its tailor-made A800 and H800 GPUs, developed as workarounds for Chinese clients, were blocked by updated US controls last October, resulting in new alternatives such as the H20.

Nvidia's authorised distributors have started to discuss shipments of the H20 with Chinese clients, and some are expected to start testing the chip soon, according to three people familiar with the matter, who declined to be identified as they are not authorised to talk to the media.

One source, which has placed H20 orders with Nvidia, said they expect the first volume shipment to arrive in China in the second quarter. Another source with a major Chinese internet gear and server maker, said they expected to start shipments of their products containing the H20 in July.